UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-23129

NEXPOINT REAL ESTATE STRATEGIES FUND

(Exact name of registrant as specified in charter)

300 Crescent Court

Suite 700

Dallas, Texas 75201

(Address of principal executive offices)(Zip code)

NexPoint Advisors, L.P.

300 Crescent Court

Suite 700

Dallas, Texas 75201

(Name and Address of Agent for Service)

Registrant’s telephone number, including area code: (844) 485-9167

Date of fiscal year end: December 31

Date of reporting period: June 30, 2018

Item 1. Reports to Stockholders.

A copy of the Semi-Annual Report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”), is attached herewith.

NexPoint Real Estate Strategies Fund

Semi-Annual Report

June 30, 2018

NexPoint Real Estate Strategies Fund

TABLE OF CONTENTS

Fund Profile	1
Financial Statements	2
Investment Portfolio	3
Statement of Assets and Liabilities	5
Statement of Operations	7
Statement of Changes in Net Assets	8
Statement of Cash Flows	10
Financial Highlights	11
Notes to Financial Statements	14
Additional Information	24
Important Information About This Report	25

Economic and market conditions change frequently.

There is no assurance that the trends described in this report will continue or commence.

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FUND PROFILE (unaudited)

NexPoint Real Estate Strategies Fund

Objective

NexPoint Real Estate Strategies Fund seeks long-term total return with an emphasis on current income.

Net Assets as of June 30, 2018

$13.4 million

Portfolio Data as of June 30, 2018

The information below provides a snapshot of NexPoint Real Estate Strategies Fund at the end of the reporting period. NexPoint Real Estate Strategies Fund is actively managed and the composition of its portfolio will change over time. Current and future holdings are subject to risk.

Industry Classification as of June 30, 2018 (%)(1)
Real Estate	78.1
Other Investments and Assets & Liabilities(2)	21.9

Real Estate Investments (Debt vs. Equity) as of June 30, 2018 (%)(1)
Public Equities	35.6
Public Debt, MBS & Preferred Stock	10.3
Private Debt(4)	32.2
Other Investments and Assets & Liabilities(2)	21.9

Top 10 Holdings as of June 30, 2018 (%)(1)(3)
RCP Keystone Hotel LLC 14.500%, 11/15/19 (U.S. Senior Loans)	16.4
Bridgeview Louetta LLC 12.00%, 8/4/21 (U.S. Senior Loans)	8.0
BHRI Flats Manager PRIME + 7.000%, 12/31/18 (U.S. Senior Loans)	7.5
Uniti Group, Inc. (Common Stocks)	6.2
Taubman Centers, Inc. (Common Stocks)	5.5
NexPoint Residential Trust, Inc. (Common Stocks)(5)	4.5
Brookdale Senior Living, Inc. (Common Stocks)	4.4
Uniti Group LP/Uniti Fiber Holdings, Inc./CSL Capital LLC 7.125%, 12/15/24 (U.S. Corporates Bonds & Notes)	3.4
Bluerock Residential Growth REIT, Series D, 7.13%, Perpetual (Preferred Stock)	3.2
FREMF Trust Series 2018-KW04, Class C 0.00%, 12/25/2032 (Mortgage-Backed Security)	3.0

⁽¹⁾   Industries and holdings are calculated as a percentage of total net assets.

⁽²⁾ Includes the Fund’s cash equivalent investments in the amount of $2,612,137.

⁽³⁾  Excludes the Fund’s cash equivalent investments.

⁽⁴⁾ Includes NRESF REIT Sub, LLC, as the entity is intended to hold private debt. NRESF REIT Sub, LLC is an affiliated issuer.

⁽⁵⁾ Affiliated issuer.

Semi-Annual Report 1

FINANCIAL STATEMENTS

June 30, 2018 NexPoint Real Estate Strategies Fund

A guide to understanding the Fund’s financial statements

Investment Portfolio	The Investment Portfolio details all of the Fund’s holdings and their value as of the last day of the reporting period. Portfolio holdings are organized by type of asset and industry to demonstrate areas of concentration and diversification.
Statement of Assets and Liabilities	This statement details the Fund’s assets, liabilities, net assets and common share price as of the last day of the reporting period. Net assets are calculated by subtracting all the Fund’s liabilities (including any unpaid expenses) from the total of the Fund’s investment and non-investment assets. The net asset value per common share is calculated by dividing net assets by the number of common shares outstanding as of the last day of the reporting period.
Statement of Operations	This statement reports income earned by the Fund and the expenses accrued by the Fund during the reporting period. The Statement of Operations also shows any net gain or loss the Fund realized on the sales of its holdings during the period as well as any unrealized gains or losses recognized over the period. The total of these results represents the Fund’s net increase or decrease in net assets from operations applicable to common shareholders.
Statements of Changes in Net Assets	These statements detail how the Fund’s net assets were affected by its operating results, distributions to common shareholders and shareholder transactions from common shares (e.g., subscriptions, redemptions and distribution reinvestments) during the reporting period. The Statements of Changes in Net Assets also detail changes in the number of common shares outstanding.
Statement of Cash Flows	This statement reports net cash and foreign currency provided or used by operating, investing and financing activities and the net effect of those flows on cash and foreign currency during the period.
Financial Highlights	The Financial Highlights demonstrate how the Fund’s net asset value per common share was affected by the Fund’s operating results. The Financial Highlights also disclose the Fund’s performance and certain key ratios (e.g., net expenses and net investment income as a percentage of average net assets).
Notes to Financial Statements	These notes disclose the organizational background of the Fund, its significant accounting policies (including those surrounding security valuation, income recognition and distributions to shareholders), federal tax information, fees and compensation paid to affiliates and significant risks and contingencies.

2 Semi-Annual Report

INVESTMENT PORTFOLIO (unaudited)

As of June 30, 2018 NexPoint Real Estate Strategies Fund

Principal Amount ($)			Amortized     Cost ($) (a)		Value ($)
	U.S. Corporates Bonds & Notes - 3.4%
	REAL ESTATE (b) - 3.4%
	500,000	Uniti Group L.P. / Uniti Fiber Holdings, Inc. / CSL Capital LLC 7.13%, 12/15/2024		457,241		455,000
		Total U.S. Corporates Bonds & Notes (Cost $457,241)				455,000
	U.S. Senior Loans (c) - 31.8%
	REAL ESTATE - 31.8%
	1,000,000	BHRI Flats Manager Term Loan, Prime + 7.000% 12/31/2018 (d)		996,248		1,000,000
	1,000,000	Bridgeview Louetta LLC Mezzanine Term Loan, 12.000% 08/04/2021 (e)		1,063,076		1,064,998
	2,200,000	RCP Keystone Hotel LLC 2nd Lien Term Loan, 14.500% 11/15/2019 (e)		2,188,383		2,200,000
		Total U.S. Senior Loans (Cost $4,247,707)				4,264,998
	Agency Collateralized Mortgage Obligations (b) - 3.7%
	1,491,164	FREMF Trust Series 2018-KW04, Class C 0.00%, 12/25/2032 (f)(h)		396,130		395,158
	17,877,822	Series 2018-KW04, Class X2A 0.10%, 09/25/2028 (g)		96,788		90,283
	1,988,235	Series 2018-KW04, Class X2B 0.10%, 12/25/2032 (g)		13,103		12,427
		Total Agency Collateralized Mortgage Obligations (Cost $506,021)				497,868
	Asset-Backed Securities (b)(d) - 1.4%
	250,000	CIFC Funding, Ltd. Series 2015-1A, Class SUB, VRN 0.00%, 01/22/2031		205,024		191,875
		Total Asset-Backed Securities (Cost $205,024)				191,875

Shares			Amortized     Cost ($) (a)		Value ($)
	Common Stocks - 35.9%
	REAL ESTATE – 35.9%
	64,500	Brookdale Senior Living, Inc. (h)(j)		687,219		586,305
	12,581	Colony Credit Real Estate, Inc., REIT		239,398		260,804
	35,235	Condor Hospitality Trust, Inc., REIT (j)		358,946		366,444
	19,000	Jernigan Capital, Inc., REIT		351,500		362,140
	21,044	NexPoint Residential Trust, Inc., REIT (i)(j)		427,718		598,702
	1,012,750	NRESF REIT SUB LLC (c)(i)		—		45,169
	12,000	Starwood Property Trust, Inc., REIT		260,831		260,520
	12,425	Taubman Centers, Inc., REIT (j)		715,593		730,093
	18,917	Tremont Mortgage Trust (h)		226,131		248,759
	55,029	United Development Funding IV, REIT (h)		128,441		183,246
	41,218	Uniti Group, Inc., REIT (j)		848,657		825,596
	9,550	Zayo Group Holdings, Inc.		347,824		348,384
		Total Common Stocks (Cost $4,592,258)				4,816,162
	Preferred Stocks - 3.2%
	FINANCIAL - 3.2%
	18,900	Bluerock Residential Growth REIT, Inc., Series D, 7.13% Perpetual		419,298		424,122
		Total Preferred Stocks (Cost $419,298)				424,122
	Cash Equivalents - 19.5%
	2,612,137	State Street Institutional U.S. Government Money Market Fund, Premier Class		2,612,137		2,612,137
		Total Cash Equivalents (Cost $2,612,137)				2,612,137
	Total Investments - 98.9%					13,262,162
	(Cost $13,039,686)
	Other Assets & Liabilities, Net - 1.1%					131,692
	Net Assets - 100.0%					13,393,854

(a) Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments.

(b) Securities exempt from registration under Rule 144A of the 1933 Act. These securities may only be resold in transaction exempt from registration to qualified institutional buyers. At June 30, 2018, these securities amounted to $1,144,743 or 8.5% of net assets.

See accompanying Notes to Financial Statements. 3

INVESTMENT PORTFOLIO (unaudited) (continued)

As of June 30, 2018 NexPoint Real Estate Strategies Fund

(c) Represents fair value as determined by the Fund’s Board of Trustees (the “Board”), or its designee in good faith, pursuant to the policies and procedures approved by the Board. Securities with a total aggregate value of $4,310,167 or 32.2% of net assets, were fair valued under the Fund’s valuation procedures as of June 30, 2018. These investments were also classified as Level 3 within the three-tier fair value hierarchy. Please see Note 2 for an explanation of this hierarchy, as well as a list of unobservable inputs used in the valuation of these instruments.

(d) Variable or floating rate security. As of June 30, 2018, the Prime rate was 5.00%.

(e) Fixed rate senior loan. Under the terms of the credit agreement, the borrower is required to pay a minimum monthly interest payment of 9.00%, and any residual accrued interest not paid monthly continues to accrue at the full rate shown. The minimum monthly interest payment is 8.00% for the Bridgeview Louetta loan and 9.00% for the RCP Keystone Hotel loan.

(f) Principal only security (“PO”). These types of securities represent the right to receive the monthly principal payments on an underlying pool of mortgages. No payments of interest on the pool are passed through to the “principal only” holder.

(g) Interest only security (“IO”). These types of securities represent the right to receive the monthly interest payments on an underlying pool of mortgages. Payments of principal on the pool reduce the value of the “interest only” holding.

(h) Non-income producing security.

(i) Affiliated issuer. Assets with a total aggregate market value of $643,871, or 4.8% of net assets, were affiliated with the Fund as of June 30, 2018.

(j) All or part of this security is pledged as collateral for short sales and written options contracts. The market value of the securities pledged as collateral was $2,525,264.

REIT — Real Estate Investment Trust

4 See accompanying Notes to Financial Statements.

STATEMENT OF ASSETS AND LIABILITIES

As of June 30, 2018 (unaudited) NexPoint Real Estate Strategies Fund

	($)
Assets
Investments from unaffiliated issuers, at value		10,006,154
Affiliated issuers, at value (Note 9)		643,871
Total Investments, at value		10,650,025
Cash equivalents (Note 2)		2,612,137
Receivable for:
Dividends and interest		273,218
Due from broker		149,258
Fund shares sold		82,040
Prepaid expenses and other assets		69,576
Total assets		13,836,254
Liabilities
Due to custodian		21,413
Due to Investment Adviser (Note 4)		132,134
Prepaid interest income		9,664
Payable for:
Fund shares redeemed		234,525
Transfer agent fees		5,537
Distributions to shareholders		79
Accrued expenses and other liabilities		39,048
Total liabilities		442,400
Commitments and Contingencies (Note 5)
Net Assets		13,393,854
Net Assets Consist of:
Paid-in capital		13,075,682
Accumulated net investment income		38,071
Accumulated realized gain		57,625
Net unrealized appreciation (depreciation) on investments		222,476
Net Assets		13,393,854
Investments, at cost		9,999,831
Affiliated investments, at cost (Note 9)		427,718
Cash equivalents, at cost (Note 2)		2,612,137

See accompanying Notes to Financial Statements. 5

STATEMENT OF ASSETS AND LIABILITIES (continued)

As of June 30, 2018 (unaudited) NexPoint Real Estate Strategies Fund

	($)
Class A:
Net assets		216,753
Shares outstanding (unlimited authorization)		10,499
Net asset value per share(a)(b)		20.64
Maximum offering price per share(c)		21.90
Class C:
Net assets		36,994
Shares outstanding (unlimited authorization)		1,785
Net asset value and offering price per share(a)		20.72
Class Z:
Net assets		13,140,107
Shares outstanding (unlimited authorization)		633,677
Net asset value, offering and redemption price per share		20.74

^(a)   Redemption price per share is equal to net asset value per share less any applicable contingent deferred sales charge (“CDSC”).

^(b)  Purchases of $500,000 or more are subject to a 1.00% CDSC if redeemed within eighteen months of purchase.

^(c)  The sales charge is 5.75%. On sales of $500,000 or more, there is no sales charge and therefore the offering will be lower.

6 See accompanying Notes to Financial Statements.

STATEMENT OF OPERATIONS

For the Year Ended June 30, 2018 (unaudited) NexPoint Real Estate Strategies Fund

	($)
Investment Income
Income:
Dividends from unaffiliated issuers		126,419
Dividends from affiliated issuers (Note 9)		10,471
Interest from unaffiliated issuers		299,277
Total Income		436,167
Expenses:
Investment advisory (Note 5)		56,485
Class A		164
Class C		8
Audit fees		26,035
Registration fees		21,400
Legal fees		18,991
Reports to shareholders		17,235
Transfer agent fees		12,519
Accounting services fees		4,697
Trustees fees (Note 5)		799
Insurance		346
Tax expense		75
Other		1,592
Total operating expenses before waiver and reimbursement (Note 5)		160,346
Less: Expenses waived or borne by the adviser and administrator		(79,497	)
Net operating expenses		80,849
Net investment income		355,318
Net Realized and Unrealized Gain (Loss) on Investments
Realized gain (loss) on:
Investments from unaffiliated issuers		(107,948	)
Change unrealized appreciation (depreciation) on:
Investments		131,294
Investments in affiliated issuers (Note 9)		(901	)
Net realized and unrealized gain (loss) on investments		22,445
Total increase in net assets resulting from operations		377,763

See accompanying Notes to Financial Statements. 7

STATEMENTS OF CHANGES IN NET ASSETS

NexPoint Real Estate Strategies Fund

	Six Months Ended June 30, 2018 (unaudited) ($)			Year Ended December 31, 2017 ($)
Increase (Decrease) in Net Assets
Operations:
Net investment income		355,318			490,767
Net realized gain (loss) on investments		(107,948	)		240,315
Net change in unrealized appreciation on investments, securities sold short, written options contracts and translation of assets and liabilities denominated in foreign currency		130,393			(63,132	)
Net increase from operations		377,763			667,950
Distributions to shareholders from:
Net investment income
Class A		(4,231	)		(2,100	)
Class C		(114	)		(64	)
Class Z		(312,902	)		(532,434	)
Net realized gains
Class A		—			(1,263	)
Class C		—			(11	)
Class Z		—			(78,300	)
Total distributions		(317,247	)		(614,172	)
Increase in net assets from operations and distributions		60,516			53,778
Share transactions:
Proceeds from sale of shares
Class A		89,561			124,785
Class C		36,000			—
Class Z		5,110,891			173,488
Value of distributions reinvested
Class A		275			84
Class C		114			75
Class Z		194,540			505,548
Repurchase of shares
Class A		(41	)		—
Class Z		(236,350	)		—
Net increase from shares transactions		5,194,990			803,980
Total increase in net assets		5,255,506			857,758
Net Assets
Beginning of period		8,138,348			7,280,590
End of period		13,393,854			8,138,348
Accumulated net investment income		38,071			—

8 See accompanying Notes to Financial Statements.

STATEMENTS OF CHANGES IN NET ASSETS (continued)

NexPoint Real Estate Strategies Fund

	Six Months Ended June 30, 2018 (unaudited) ($)			Year Ended December 31, 2017 ($)
Class A:
Shares sold		4,370			6,064
Issued for distribution reinvested		13			4
Shares repurchased		(2	)		—
Net increase in fund shares		4,381			6,068
Class C:
Shares sold		1,725			—
Issued for distribution reinvested		6			4
Net increase in fund shares		1,731			4
Class Z:
Shares sold		248,910			8,228
Issued for distribution reinvested		9,664			24,486
Shares repurchased		(11,396	)		—
Net increase in fund shares		247,178			32,714

See accompanying Notes to Financial Statements. 9

STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2018 (unaudited) NexPoint Real Estate Strategies Fund

	($)
Cash Flows Provided by (Used for) Operating Activities:
Net increase in net assets resulting from operations		377,763
Adjustments to Reconcile Net Changes In Net Assets Resulting from Operations to Net Cash Used In Operating Activities:
Purchases of investment securities from unaffiliated issuers		(5,005,258	)
Purchases of investment securities from affiliated issuers		(36,981	)
Proceeds from disposition of investment securities from unaffiliated issuers		2,582,205
Proceeds from short-term portfolio investments, net		(2,497,605	)
Net accretion of discount		(16,928	)
Net realized loss on investments from unaffiliated issuers		107,948
Net change in unrealized appreciation (depreciation) on investments		(130,393	)
Increase in receivable for due from broker		(149,258	)
Increase in receivable for dividends and interest		(113,190	)
Increase in prepaid expenses and other assets		(69,125	)
Increase in due to transfer agent fees		5,537
Decrease in due to Investment Adviser		(39,367	)
Increase in prepaid interest income		(57,836	)
Decrease in accrued expenses and other liabilities		(34,554	)
Net cash flow used in operating activities		(5,077,042	)
Cash Flows Received from (Used In) Financing Activities:
Increase in due to custodian		21,413
Distributions paid in cash		(122,239	)
Proceeds from shares sold, net of receivable		5,179,412
Payments from shares redeemed, net of payable		(1,866	)
Net cash flow received from (used in) financing activities		5,076,720
Net Decrease in Cash		(322	)
Cash & Foreign Currency
Beginning of period		322
End of period		0
Supplemental disclosure of cash flow information:
Reinvestment of Distributions		194,929

10 See accompanying Notes to Financial Statements.

FINANCIAL HIGHLIGHTS

NexPoint Real Estate Strategies Fund, Class A

Selected data for a share outstanding throughout each period is as follows:

	For the Six Months Ended June 30, 2018 (unaudited)			For the Year Ended December 31, 2017			For the Period Ended December 31, 2016(a)
Net Asset Value, Beginning of Period	$	20.65		$	20.62		$	20.00
Income from Investment Operations:
Net investment income(b)		0.76			1.44			0.14
Redemption fees added to paid-in capital		—			—			—
Net realized and unrealized gain/(loss)		(0.13	)		0.19			0.68
Total from investment operations		0.63			1.63			0.82
Less Distributions Declared to Shareholders:
From net investment income		(0.64	)		(1.39	)		(0.20	)
From net realized gains		—			(0.21	)		—
Total distributions declared to shareholders		(0.64	)		(1.60	)		(0.20	)
Net Asset Value, End of Period(c)	$	20.64		$	20.65		$	20.62
Total Return(c)(d)		3.17	%(e)		8.18	%		4.12	%(e)
Ratios to Average Net Assets(f)/Supplemental Data:
Net assets, end of period (in 000’s)	$	217		$	126		$	1
Gross operating expenses(g)		3.78	%		4.75	%		10.78	%
Net investment income		7.62	%		6.99	%		1.56	%
Portfolio turnover rate		30	%(e)		99	%		14	%(e)
Average commission rate paid(h)	$	0.0117		$	0.0155		$	0.0295

(a) Class commenced operations on July 21, 2016.

(b) Net investment income (loss) per share was calculated using average shares outstanding during the period.

(c) The Net Asset Value per share and total return have been calculated based on net assets which include adjustments made in accordance with U.S. Generally Accepted Accounting Principles required at period end for financial reporting purposes. These figures do not necessarily reflect the Net Asset Value per share or total return experienced by the shareholder at period end.

(d) Total return is at net asset value assuming all distributions are reinvested and no initial sales charge or CDSC. For periods with waivers/reimbursements, had the Fund’s investment adviser not waived or reimbursed a portion of expenses, total return would have been lower.

(e) Not annualized.

(f) All ratios for the period have been annualized, unless otherwise indicated.

(g) Supplemental expense ratios are shown below:

	For the Six Months Ended June 30, 2018 (unaudited)			For the Year Ended December 31, 2017			For the Period Ended December 31, 2016(a)
Net operating expenses (net of waiver/reimbursement, if applicable, but gross of all other operating expenses)		2.02	%		2.01	%		2.08	%
Interest expense and commitment fees		—	%		—	%		—	%
Dividends and fees on securities sold short		—	%		0.01	%		—	%

(h) Represents the total dollar amount of commissions paid on portfolio transactions divided by total number of portfolio shares purchased and sold for which commissions were charged.

See accompanying Notes to Financial Statements. 11

FINANCIAL HIGHLIGHTS

NexPoint Real Estate Strategies Fund, Class C

Selected data for a share outstanding throughout each period is as follows:

	For the Six Months Ended June 30, 2018 (unaudited)			For the Year Ended December 31, 2017			For the Period Ended December 31, 2016(a)
Net Asset Value, Beginning of Period	$	20.72		$	20.58		$	20.00
Income from Investment Operations:
Net investment income(b)		0.96			1.12			0.04
Redemption fees added to paid-in capital		—			—			—
Net realized and unrealized gain/(loss)		(0.38	)		0.46			0.71
Total from investment operations		0.58			1.58			0.75
Less Distributions Declared to Shareholders:
From net investment income		(0.58	)		(1.23	)		(0.17	)
From net realized gains		—			(0.21	)		—
Total distributions declared to shareholders		(0.58	)		(1.44	)		(0.17	)
Net Asset Value, End of Period(c)	$	20.72		$	20.72		$	20.58
Total Return(c)(d)		2.90	%(e)		7.94	%		3.78	%(e)
Ratios to Average Net Assets(f)/Supplemental Data:
Net assets, end of period (in 000’s)	$	37		$	1		$	1
Gross operating expenses(g)		4.20	%		5.05	%		11.53	%
Net investment income		9.52	%		5.39	%		0.45	%
Portfolio turnover rate		30	%(e)		99	%		14	%(e)
Average commission rate paid(h)	$	0.0117		$	0.0155		$	0.0295

(a) Class commenced operations on July 21, 2016.

(b) Net investment income (loss) per share was calculated using average shares outstanding during the period.

(c) The Net Asset Value per share and total return have been calculated based on net assets which include adjustments made in accordance with U.S. Generally Accepted Accounting Principles required at period end for financial reporting purposes. These figures do not necessarily reflect the Net Asset Value per share or total return experienced by the shareholder at period end.

(d) Total return is at net asset value assuming all distributions are reinvested and no initial sales charge or CDSC. For periods with waivers/reimbursements, had the Fund’s investment adviser not waived or reimbursed a portion of expenses, total return would have been lower.

(e) Not annualized.

(f) All ratios for the period have been annualized, unless otherwise indicated.

(g) Supplemental expense ratios are shown below:

	For the Six Months Ended June 30, 2018 (unaudited)			For the Year Ended December 31, 2017			For the Period Ended December 31, 2016(a)
Net operating expenses (net of waiver/reimbursement, if applicable, but gross of all other operating expenses)		2.59	%		2.87	%		2.83	%
Interest expense and commitment fees		—	%		—	%		—	%
Dividends and fees on securities sold short		—	%		0.13	%		—	%

(h) Represents the total dollar amount of commissions paid on portfolio transactions divided by total number of portfolio shares purchased and sold for which commissions were charged.

12 See accompanying Notes to Financial Statements.

FINANCIAL HIGHLIGHTS

NexPoint Real Estate Strategies Fund, Class Z

Selected data for a share outstanding throughout each period is as follows:

	For the Six Months Ended June 30, 2018 (unaudited)			For the Year Ended December 31, 2017			For the Period Ended December 31, 2016(a)
Net Asset Value, Beginning of Period	$	20.73		$	20.57		$	19.95
Income from Investment Operations:
Net investment income(b)		0.79			1.33			0.24
Redemption fees added to paid-in capital		—			—			—
Net realized and unrealized gain/(loss)		(0.12	)		0.48			0.59
Total from investment operations		0.67			1.81			0.83
Less Distributions Declared to Shareholders:
From net investment income		(0.66	)		(1.44	)		(0.21	)
From net realized gains		—			(0.21	)		—
Total distributions declared to shareholders		(0.66	)		(1.65	)		(0.21	)
Net Asset Value, End of Period(c)	$	20.74		$	20.73		$	20.57
Total return(c)(d)		3.38	%(e)		9.12	%		4.17	%(e)
Ratios to Average Net Assets(f)/Supplemental Data:
Net assets, end of period (in 000’s)	$	13,140		$	8,011		$	7,279
Gross operating expenses(g)		3.53	%		4.60	%		11.26	%
Net investment income		7.84	%		6.44	%		2.45	%
Portfolio turnover rate		30	%(e)		99	%		14	%(e)
Average commission rate paid(h)	$	0.0117		$	0.0155		$	0.0295

(a) Class commenced operations on July 1, 2016.

(b) Net investment income (loss) per share was calculated using average shares outstanding during the period.

(c) The Net Asset Value per share and total return have been calculated based on net assets which include adjustments made in accordance with U.S. Generally Accepted Accounting Principles required at period end for financial reporting purposes. These figures do not necessarily reflect the Net Asset Value per share or total return experienced by the shareholder at period end.

(d) Total return is at net asset value assuming all distributions are reinvested and no initial sales charge or CDSC. For periods with waivers/reimbursements, had the Fund’s investment adviser not waived or reimbursed a portion of expenses, total return would have been lower.

(e) Not annualized.

(f) All ratios for the period have been annualized, unless otherwise indicated.

(g) Supplemental expense ratios are shown below:

	For the Six Months Ended June 30, 2018 (unaudited)			For the Years Ended December 31, 2017			For the Period Ended December 31, 2016(a)
Net operating expenses (net of waiver/reimbursement, if applicable, but gross of all other operating expenses)		1.78	%		1.87	%		1.83	%
Interest expense and commitment fees		—	%		—	%		—	%
Dividends and fees on securities sold short		—	%		0.13	%		—	%

(h) Represents the total dollar amount of commissions paid on portfolio transactions divided by total number of portfolio shares purchased and sold for which commissions were charged.

See accompanying Notes to Financial Statements. 13

NOTES TO FINANCIAL STATEMENTS

June 30, 2018 NexPoint Real Estate Strategies Fund

Note 1. Organization

NexPoint Real Estate Strategies Fund (the “Fund”) is a Delaware statutory trust and is registered with the U.S. Securities and Exchange Commission (the “SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), as a non-diversified, closed-end management investment company that operates as an interval fund. The Fund commenced operations on July 1, 2016. This report includes information for the six months ended June 30, 2018. The Fund pursues its investment objective by investing, under normal circumstances, at least 80% of its assets (defined as net assets plus the amount of any borrowing for investment purposes) in real estate and real estate related securities. NexPoint Advisors, L.P. (“NexPoint” or “the Investment Adviser”), an affiliate of Highland Capital Management, L.P. (“Highland”), is the investment adviser to the Fund. Once each quarter, the Fund will offer to repurchase at net asset value (“NAV”) no less than 5% of the outstanding shares of the Fund, unless such offer is suspended or postponed in accordance with regulatory requirements. The offer to purchase shares is a fundamental policy that may not be changed without the vote of the holders of a majority of the Fund’s outstanding voting securities (as defined in the 1940 Act).

Fund Shares

The Fund is authorized to issue an unlimited number of shares of beneficial interest with no par value (each a “Share” and collectively, the “Shares”). The Fund currently offers the following three share classes to investors, Class A, Class C and Class Z Shares. A fourth share class, the Class L Shares, has been registered but is not currently offered. Class A Shares are sold with a front-end sales charge. Maximum sales load imposed on purchases of Class A Shares (as a percentage of offering price) is 5.75%. There is no front-end sales charge imposed on individual purchases of Class A Shares of $500,000 or more. The front-end sales charge is also waived in other instances as described in the Fund’s prospectus. Purchases of $500,000 or more of Class A Shares at net asset value (“NAV”) pursuant to a sales charge waiver are subject to a 1.00% contingent deferred sales charge (“CDSC”) if redeemed within eighteen months of purchase. Class C Shares may be subject to a CDSC. The maximum CDSC imposed on redemptions of Class C Shares is 1.00% within the first eighteen months of purchase and 0.00% thereafter. No front-end or CDSCs are assessed by the Trust with respect to Class Z Shares of the Fund.

Note 2. Significant Accounting Policies

The following summarizes the significant accounting policies consistently followed by the Fund in the preparation of its financial statements.

Use of Estimates

The Fund is an investment company that applies the accounting and reporting guidance of Accounting Standards Codification Topic 946 applicable to investment companies. The Fund’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require the Investment Adviser to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially.

Fund Valuation

The net asset value (“NAV”) of the Fund’s common shares is calculated daily on each day that the NYSE is open for business as of the close of the regular trading session on the NYSE, usually 4:00 PM, Eastern Time. The NAV is calculated by dividing the value of the Fund’s net assets attributable to common shares by the numbers of common shares outstanding.

Valuation of Investments

In computing the Fund’s net assets attributable to shares, securities with readily available market quotations on the NYSE, National Association of Securities Dealers Automated Quotation (“NASDAQ”), or other nationally recognized exchange, use the closing quotations on the respective exchange for valuation of those securities. Securities for which there are no readily available market quotations will be valued pursuant to policies adopted by the Fund’s Board of Trustees (the “Board”). Typically, such securities will be valued at the mean between the most recently quoted bid and ask prices provided by the principal market makers. If there is more than one such principal market maker, the value shall be the average of such means. Securities without a sale price or quotations from principal market makers on the valuation day may be priced by an independent pricing service. Generally, the Fund’s loan and bond positions are not traded on exchanges and consequently are valued based on a mean of the bid and ask price from the third-party pricing services or broker-dealer sources that the Investment Adviser has determined to have the capability to provide appropriate pricing services which have been approved by the Board.

Securities for which market quotations are not readily available, or for which the Fund has determined that the

14 Semi-Annual Report

NOTES TO FINANCIAL STATEMENTS (continued)

June 30, 2018 NexPoint Real Estate Strategies Fund

price received from a pricing service or broker-dealer is “stale” or otherwise does not represent fair value (such as when events materially affecting the value of securities occur between the time when market price is determined and calculation of the Fund’s NAV), will be valued by the Fund at fair value, as determined by the Board or its designee in good faith in accordance with procedures approved by the Board, taking into account factors reasonably determined to be relevant, including, but not limited to: (i) the fundamental analytical data relating to the investment; (ii) the nature and duration of restrictions on disposition of the securities; and (iii) an evaluation of the forces that influence the market in which these securities are purchased and sold. In these cases, the Fund’s NAV will reflect the affected portfolio securities’ fair value as determined in the judgment of the Board or its designee instead of being determined by the market. Using a fair value pricing methodology to value securities may result in a value that is different from a security’s most recent sale price and from the prices used by other investment companies to calculate their NAVs. Determination of fair value is uncertain because it involves subjective judgments and estimates.

There can be no assurance that the Fund’s valuation of a security will not differ from the amount that it realizes upon the sale of such security. Those differences could have a material impact to the Fund. The NAV shown in the Fund’s financial statements may vary from the NAV published by the Fund as of its period end because portfolio securities transactions are accounted for on the trade date (rather than the day following the trade date) for financial statement purposes.

Fair Value Measurements

The Fund has performed an analysis of all existing investments and derivative instruments to determine the significance and character of inputs to their fair value determination. The levels of fair value inputs used to measure the Fund’s investments are characterized into a fair value hierarchy. Where inputs for an asset or liability fall into more than one level in the fair value hierarchy, the investment is classified in its entirety based on the lowest level input that is significant to that investment’s valuation. The three levels of the fair value hierarchy are described below:

Level 1 — Quoted unadjusted prices for identical instruments in active markets to which the Fund has access at the date of measurement;

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active, but

are valued based on executed trades; broker quotations that constitute an executable price; and alternative pricing sources supported by observable inputs are classified within Level 2. Level 2 inputs are either directly or indirectly observable for the asset in connection with market data at the measurement date; and

Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. In certain cases, investments classified within Level 3 may include securities for which the Fund has obtained indicative quotes from broker-dealers that do not necessarily represent prices the broker may be willing to trade on, as such quotes can be subject to material management judgment. Unobservable inputs are those inputs that reflect the Fund’s own assumptions that market participants would use to price the asset or liability based on the best available information.

The Investment Adviser has established policies and procedures, as described above and approved by the Board, to ensure that valuation methodologies for investments and financial instruments that are categorized within all levels of the fair value hierarchy are fair and consistent. A Pricing Committee has been established to provide oversight of the valuation policies, processes and procedures, and is comprised of personnel from the Investment Adviser and its affiliates. The Pricing Committee meets monthly to review the proposed valuations for investments and financial instruments and is responsible for evaluating the overall fairness and consistent application of established policies.

As of June 30, 2018, the Fund’s investments consisted of REITs and other real estate investments, senior loans, corporate bonds and notes, common stocks, preferred stocks, mortgage-backed securities and cash equivalents. The fair value of the Fund’s bonds are generally based on quotes received from brokers or independent pricing services. Bonds with quotes that are based on actual trades with a sufficient level of activity on or near the measurement date are classified as Level 2 assets. Bonds that are priced using quotes derived from implied values, indicative bids, or a limited number of actual trades are classified as Level 3 assets because the inputs used by the brokers and pricing services to derive the values are not readily observable.

The fair value of the Fund’s common and preferred stocks that are not actively traded on national exchanges are generally priced using quotes derived from implied values, indicative bids, or a limited amount of actual trades and

Semi-Annual Report 15

NOTES TO FINANCIAL STATEMENTS (continued)

June 30, 2018 NexPoint Real Estate Strategies Fund

are classified as Level 3 assets because the inputs used by the brokers and pricing services to derive the values are not readily observable. The Fund’s real estate investments include equity interests in limited liability companies and equity issued by Real Estate Investment Trusts (“REITs”) that invest in commercial real estate. The fair value of real estate investments that are not actively traded on national exchanges are based on internal models developed by the Investment Adviser. The significant inputs to the models include cash flow projections for the underlying properties, capitalization rates and appraisals performed by independent valuation firms. These inputs are not readily observable, and the Fund has classified the investments as Level 3 assets.

At the end of each calendar quarter, the Investment Adviser evaluates the Level 2 and 3 assets and liabilities for changes in liquidity, including but not limited to: whether a

broker is willing to execute at the quoted price, the depth and consistency of prices from third party services, and the existence of contemporaneous, observable trades in the market. Additionally, the Investment Adviser evaluates the Level 1 and 2 assets and liabilities on a quarterly basis for changes in listings or delistings on national exchanges.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Fund’s investments may fluctuate from period to period. Additionally, the fair value of investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values the Fund may ultimately realize. Further, such investments may be subject to legal and other restrictions on resale or otherwise less liquid than publicly traded securities.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Transfers in and out of the levels are recognized at the value at the end of the period. A summary of the inputs used to value the Fund’s assets as of June 30, 2018 is as follows:

	Total value at June 30, 2018		Level 1 Quoted Price		Level 2 Significant Observable Inputs		Level 3 Significant Unobservable Inputs
U.S. Corporates Bonds & Notes	$	455,000	$	—		455,000	$	—
U.S. Senior Loans		4,264,998		—		—		4,264,998
Agency Collateralized Mortgage Obligations		497,868		—		497,868		—
Asset-Backed Securities		191,875		—		191,875		—
Common Stocks
Real Estate		4,816,162		4,770,993		—		45,169
Preferred Stocks		424,122		424,122		—		—
Cash Equivalents		2,612,137		2,612,137		—		—
Total	$	13,262,162	$	7,807,252	$	1,144,743	$	4,310,167

The table below sets forth a summary of changes in the Fund’s assets measured at fair value using significant unobservable inputs (Level 3) for the six months ended June 30, 2018.

	Balance as of December 31, 2017		Transfers Into Level 3		Transfers Out of Level 3		Net Amortization (Accretion) of Premium/ Discount		Net Realized Gain/ (Loss)		Net Unrealized Appreciation/ (Depreciation)			Net Purchases		Net (Sales)		Balance as of June 30, 2018		Change in Unrealized Appreciation (Depreciation) from Investments Held at June 30, 2018
U.S. Senior Loans
Real Estate	$	3,200,000	$	—	$	—	$	5,065	$	—	$	(5,065	)	$	1,064,998	$	—	$	4,264,998	$	(5,065	)
Common Stocks
Real Estate		58,436		—		—		—		—		(13,267	)		—		—		45,169		(13,267	)
Total	$	3,258,436	$	—	$	—	$	5,065	$	—	$	(18,332	)	$	1,064,998	$	—	$	4,310,167	$	(18,332	)

16 Semi-Annual Report

NOTES TO FINANCIAL STATEMENTS (continued)

June 30, 2018 NexPoint Real Estate Strategies Fund

Investments designated as Level 3 may include assets valued using quotes or indications furnished by brokers which are based on models or estimates and may not be executable prices. In light of the developing market conditions, the Investment Adviser continues to search for

observable data points and evaluate broker quotes and indications received for portfolio investments.

For the six months ended June 30, 2018, there were no transfers between Levels.

The following is a summary of significant unobservable inputs used in the fair valuations of assets and liabilities categorized within Level 3 of the fair value hierarchy:

Category	Market Value at 6/30/2018		Valuation Technique		Unobservable Inputs		Input Value(s)
U.S. Senior Loans	$	4,264,998		Appraisal		N/A		N/A
				Cost Price		N/A		N/A
Common Stock		45,169		Net Asset Value		N/A		N/A
Total	$	4,310,167

Security Transactions

Security transactions are accounted for on the trade date. Realized gains/(losses) on investments sold are recorded on the basis of the specific identification method for both financial statement and U.S. federal income tax purposes taking into account any foreign taxes withheld.

Income Recognition

Corporate actions (including cash dividends) are recorded on the ex-dividend date, net of applicable withholding taxes, except for certain foreign corporate actions, which are recorded as soon after ex-dividend date as such information becomes available and is verified. Interest income is recorded on the accrual basis.

Accretion of discount and amortization of premium on taxable bonds and loans are computed to the call or maturity date, whichever is shorter, using the effective yield method. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.

U.S. Federal Income Tax Status

The Fund is treated as a separate taxpayer for U.S. federal income tax purposes. The Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code of 1986, as amended, and will distribute substantially all of its taxable income and gains, if any, for the tax year, and as such will not be subject to U.S. federal income taxes. In addition, the Fund intends to distribute, in each calendar year, all of its net investment income, capital gains and certain other amounts, if any, such that the Fund should not be subject to U.S. federal excise tax. Therefore, no U.S. federal income or excise tax provisions are recorded.

The Investment Adviser has analyzed the Fund’s tax positions taken on U.S. federal income tax returns for all open

tax years (current and prior three tax years), and has concluded that no provision for U.S. federal income tax is required in the Fund’s financial statements. The Fund’s U.S. federal and state income and U.S. federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue. Furthermore, the Investment Adviser of the Fund is also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next 12 months.

Distributions to Shareholders

The Fund plans to pay distributions from net investment income monthly and net realized capital gains annually to common shareholders. To permit the Fund to maintain more stable monthly distributions and annual distributions, the Fund may from time to time distribute less than the entire amount of income and gains earned in the relevant month or year, respectively. The undistributed income and gains would be available to supplement future distributions. In certain years, this practice may result in the Fund distributing, during a particular taxable year, amounts in excess of the amount of income and gains earned therein. Such distributions would result in a portion of each distribution occurring in that year to be treated as a return of capital to shareholders. Shareholders of the Fund will automatically have all distributions reinvested in Common Shares of the Fund issued by the Fund in accordance with the Fund’s Dividend Reinvestment Plan (the “Plan”) unless an election is made to receive cash. The number of newly issued Common Shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the lesser of (i) the NAV per Common Share determined on the Declaration Date and (ii) the market price per Common Share as of the

Semi-Annual Report 17

NOTES TO FINANCIAL STATEMENTS (continued)

June 30, 2018 NexPoint Real Estate Strategies Fund

close of regular trading on the NYSE on the Declaration Date. Participants in the Plan requesting a sale of securities through the plan agent of the Plan are subject to a sales fee and a brokerage commission.

Organization and Offering Costs

Organization costs include the cost of incorporating, such as the cost of legal services and other fees pertaining to the Fund’s organization, and are expensed as incurred. Offering costs include legal fees pertaining to the preparation of the Fund’s initial registration statement and other costs pertaining to the public offering of the Fund’s shares of common stock. Offering costs are accounted for as a deferred charge until operations begin and thereafter are amortized to expense over 12 months on a straight-line basis. Both organization costs and offering costs are subject to an expense limitation agreement as described further in Note 5.

Cash & Cash Equivalents

The Fund considers liquid assets deposited with a bank and certain short-term debt instruments of sufficient credit quality with original maturities of three months or less to be cash equivalents. The Fund also considers money market instruments that invest in cash equivalents to be cash equivalents. These investments represent amounts held with financial institutions that are readily accessible to pay Fund expenses or purchase investments. Cash and cash equivalents are valued at cost plus accrued interest, which approximates market value. The value of cash equivalents denominated in foreign currencies is determined by converting to U.S. dollars on the date of the Statement of Assets and Liabilities.

Foreign Currency

Accounting records of the Fund are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at exchange rates using the current 4:00 PM London Time Spot Rate. Fluctuations in the value of the foreign currencies and other assets and liabilities resulting from changes in exchange rates, between trade and settlement dates on securities transactions and between the accrual and payment dates on dividends, interest income and foreign withholding taxes, are recorded as unrealized foreign currency gains/(losses). Realized gains/(losses) and unrealized appreciation/(depreciation) on investment securities and income and expenses are translated on the respective dates of such transactions. The effects of changes in foreign currency exchange rates on investments in securities are not segregated in the Statement of Operations from the effects of changes in market prices of those securities, but are included with the net realized and unrealized gain or loss on investment securities.

Securities Sold Short

The Fund may sell securities short. A security sold short is a transaction in which the Fund sells a security it does not own in anticipation that the market price of that security will decline. When the Fund sells a security short, it must borrow the security sold short from a broker-dealer and deliver it to the buyer upon conclusion of the transaction. The Fund may have to pay a fee to borrow particular securities and is often obligated to pay over any dividends or other payments received on such borrowed securities. In some circumstances, The Fund may be allowed by its prime broker to utilize proceeds from securities sold short to purchase additional investments, resulting in leverage.

Note 3. U.S. Federal Income Tax Information

The character of income and gains to be distributed is determined in accordance with income tax regulations which may differ from U.S. GAAP. These differences include (but are not limited to) investments organized as partnerships for tax purposes, foreign taxes, investments in futures, losses deferred to off-setting positions, tax treatment of organizational start-up costs, losses deferred due to wash sale transactions, dividends deemed paid upon shareholder redemption of Fund shares and tax attributes from Fund reorganizations. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations. These reclassifications have no impact on the NAV of the Fund. The calculation of net investment income per share in the Financial Highlights table excludes these adjustments.

For the year ended December 31, 2017, permanent differences chiefly resulting from foreign currency gains and losses, and distribution re-designations were identified and reclassified among the components of the Fund’s net assets as follows:

Undistributed Net Investment Income		Accumulated Net Realized Gain/(Loss)			Paid-in-Capital
$	38,558	$	(36,587	)	$	(1,971	)

For the year ended December 31, 2017, the Fund’s most recent tax year end, components of distributable earnings on a tax basis are as follows:

Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Net Tax Appreciation/ (Depreciation)(1)
$	110,583	$	54,990	$	92,083

⁽¹⁾   Other temporary differences is comprised of deferred REIT income.

18 Semi-Annual Report

NOTES TO FINANCIAL STATEMENTS (continued)

June 30, 2018 NexPoint Real Estate Strategies Fund

For the period ended December 31, 2017, the Fund did not have capital loss carryovers.

The tax character of distributions paid during the year ended December 31, 2017 (unless otherwise indicated) is as follows:

Distributions Paid From:	2016		2017
Ordinary Income(1)	$	73,746	$	565,049
Realized Gains		-	$	49,123

⁽¹⁾  For tax purposes, short-term capital gains distributions, if any, are considered ordinary income distributions.

The above mentioned distributions are reflected on a tax basis. The tax basis distributions are less than the book basis distributions reflected on the Statement of Changes in Net Assets.

Unrealized appreciation and depreciation at June 30, 2018, based on cost of investments for U.S. federal income tax purposes is:

Gross Appreciation		Gross Depreciation			Net Appreciation/ (Depreciation)(1)		Cost
$	370,305	$	(147,829	)	$	222,476	$	13,039,686

⁽¹⁾   Any differences between book-basis and tax-basis net unrealized appreciation/(depreciation) are primarily due to non-taxable dividends.

Qualified Late Year Ordinary and Post October Losses

Under current laws, certain capital losses realized after October 31 may be deferred (and certain ordinary losses after January 1st may be deferred) and treated as occurring on the first day of the following fiscal year.

Note 4. Asset Coverage

The Fund is required to maintain 300% asset coverage with respect to any amounts borrowed. Asset coverage is calculated by subtracting the Fund’s total liabilities, not including any amount representing bank borrowings and senior securities, from the Fund’s total assets and dividing the result by the principal amount of the borrowings outstanding. As of June 30, 2018, the Fund did not have any outstanding borrowings.

Note 5. Investment Advisory, Service and Distribution, Trustee and Other Fees

Investment Advisory Fee

The Investment Adviser to the Fund receives an annual fee, paid monthly, in an amount equal to 1.25% of the Fund’s Daily Gross Assets. The Fund’s “Daily Gross Assets” is an amount equal to the total assets of the Fund, including assets resulting from leverage, less any liabilities not representing leverage.

Service and Distribution Fees

The Distributor serves as the principal underwriter and distributor of the Fund’s shares. The Distributor receives the front-end sales charge imposed on the sale of Class A Shares and the contingent deferred sales charge (“CDSC”) imposed on certain redemptions of Class A and Class C Shares. The Fund has adopted a “Shareholder Servicing Plan and Agreement” (the “Plan”) under which the Fund may compensate financial industry professionals for providing ongoing services in respect of clients with whom they have distributed shares of the Fund. The Plan operates in a manner consistent with Rule 12b-1 under the 1940 Act, which regulates the manner in which an open-end investment company may directly or indirectly bear the expenses of distributing its shares. Although the Fund is not an open-end investment company, it has undertaken to comply with the terms of Rule 12b-1 as a condition of an exemptive order under the 1940 Act which permits it to have a multi-class structure, CDSCs and distribution and shareholder servicing fees. Under the Plan, the Fund may incur expenses on an annual basis equal to 0.25% of the average net assets of the Class A and Class C Shares.

Class C shares will pay to the Distributor a distribution fee that will accrue at an annual rate equal to 0.75% of the Fund’s average daily net assets attributable to Class C shares and will be payable on a quarterly basis.

Expense Limitation Agreement

The Investment Adviser and the Fund have entered into an expense limitation and reimbursement agreement (the “Expense Limitation Agreement”) under which the Investment Adviser has agreed contractually to waive its fees and to pay or absorb the ordinary operating expenses of the Fund (including organizational and offering expenses, but excluding distribution fees, interest, dividend expenses on short sales, brokerage commissions and other transaction costs, acquired fund fees and expenses, taxes, expenses payable by the Fund for third party administration services, litigation expenses and extraordinary expenses), to the extent that they exceed 1.75% per annum of the Fund’s average Daily Gross Assets (the “Expense Limitation”). “Daily Gross Assets” is defined in the Expense Limitation Agreement as an amount equal to total assets, less any liabilities, but excluding liabilities evidencing leverage. If the Fund incurs expenses excluded from the Expense Limitation Agreement, the Fund’s expense ratio would be higher and could exceed the Expense Limitation. In consideration of the Investment Adviser’s agreement to limit the Fund’s expenses, the Fund has agreed to repay the Investment Adviser in the amount of any fees waived and Fund expenses paid or absorbed, subject to

Semi-Annual Report 19

NOTES TO FINANCIAL STATEMENTS (continued)

June 30, 2018 NexPoint Real Estate Strategies Fund

the limitations that: (1) the reimbursement for fees and expenses will be made only if payable not more than three years from the date of the reimbursement; and (2) the reimbursement may not be made if it would cause the Expense Limitation as of the time of waiver to be exceeded. The Expense Limitation Agreement will remain in effect until at least May 1, 2019 unless and until the Board approves its modification or termination. The Expense Limitation Agreement may be terminated only by the Board. After the expiration of the Expense Limitation Agreement, the agreement may be renewed at the discretion of the Investment Adviser and the Board.

On June 30, 2018, the amounts subject to possible future recoupment under the Expense Limitation were as follows:

Expiring during Fiscal Years Ending December 31,
2019	2020	2021
$286,453	$207,661	$79,497

During the six months ended June 30, 2018, the Investment Adviser did not recoup any amounts previously waived or reimbursed.

Fees Paid to Officers and Trustees

Each Trustee who is not an “interested person” of the Fund as defined in the 1940 Act (the “Independent Trustees”) receives an annual retainer of $150,000 payable in quarterly installments and allocated among each portfolio in the Highland Fund Complex overseen by such Trustee based on relative net assets. The “Highland Fund Complex” consists of all of the registered investment companies advised by the Investment Adviser or its affiliated advisers and NexPoint Capital, Inc., a closed-end management investment company that has elected to be treated as a business development company under the 1940 Act as of the date of this report. Effective December 4, 2015, Mr. Powell resigned from his position with the Investment Adviser. Prior to December 8, 2017, Mr. Powell was treated as an Interested Trustee of the Trust for all purposes other than compensation and the Trust’s code of ethics.

The Fund pays no compensation to its officers, all of whom are employees of the Investment Adviser or one of its affiliates.

Due to Adviser

The balance shown as “Due to Investment Adviser” on the Statement of Assets and Liabilities represents amounts owed to the Investment Adviser for advisory fees and Fund expenses paid by the Investment Adviser.

Indemnification

Under the Fund’s organizational documents, the officers and Trustees have been granted certain indemnification

rights against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund may enter into contracts with service providers that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated.

Note 6. Repurchase of Shares

Once each quarter, the Fund will offer to repurchase at NAV no less than 5% of the outstanding shares of the Fund (the “Repurchase Offer Amount”), unless such offer is suspended or postponed in accordance with regulatory requirements. The offer to purchase shares is a fundamental policy that may not be changed without the vote of the holders of a majority of the Fund’s outstanding voting securities (as defined in the 1940 Act). Shareholders will be notified in writing of each quarterly repurchase offer and the date the repurchase offer ends (the “Repurchase Request Deadline”). Shares will be repurchased at the NAV per share determined as of the close of regular trading on the NYSE no later than the 14th day after the Repurchase Request Deadline, or the next business day if the 14th day is not a business day.

If shareholders tender for repurchase more than the Repurchase Offer Amount for a given repurchase offer, the Fund will repurchase the shares on a pro rata basis. However, the Fund may accept all shares tendered for repurchase by shareholders who own less than one hundred shares and who tender all of their shares, before prorating other amounts tendered. In addition, the Fund will accept the total number of shares tendered in connection with required minimum distributions from an IRA or other qualified retirement plan.

The Fund conducted its quarterly tender offer from March 2, 2018, until expiration on March 30, 2018 at 4:00 p.m. New York City time, during which the Fund offered to purchase for cash up to 5.0% of its outstanding shares of common stock. During the first quarter tender offer, 95 shares of the Fund were tendered for repurchase at an average price of $19.60/share, constituting approximately 0.02% of the Fund’s outstanding shares.

The Fund conducted its quarterly tender offer from May 29, 2018, until expiration on June 28, 2018 at 4:00 p.m. New York City time, during which the Fund offered to purchase for cash up to 5.0% of its outstanding shares of common stock. During the second quarter tender offer, 11,303 shares of the Fund were tendered for repurchase at an average price of $20.75/share, constituting approximately 1.76% of the Fund’s outstanding shares.

20 Semi-Annual Report

NOTES TO FINANCIAL STATEMENTS (continued)

June 30, 2018 NexPoint Real Estate Strategies Fund

Note 7. Disclosure of Significant Risks and Contingencies

The primary risks of investing in the Fund are described below in alphabetical order:

Concentration in Real Estate Securities Risk

Although the fund does not invest directly in real estate, the Fund will concentrate its investments in investment vehicles that invest principally in real estate and real estate related securities, its portfolio will be significantly impacted by the performance of the real estate market and may experience more volatility and be exposed to greater risk than a more diversified portfolio. The values of companies engaged in the real estate industry are affected by: (i) changes in general economic and market conditions; (ii) changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi) casualty and condemnation losses; (vii) variations in rental income, neighborhood values or the appeal of property to tenants; (viii) the availability of financing and (ix) changes in interest rates and leverage.

Debt Securities Risk

When the Fund invests in debt securities, the value of the investment in the Fund will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of debt securities. In general, the market price of debt securities with longer maturities will increase or decrease more in response to changes in interest rates than shorter-term securities. Other risk factors include credit risk (the debtor may default) and prepayment risk (the debtor may pay its obligation early, reducing the amount of interest payments). These risks could affect the value of a particular investment, possibly causing the Fund’s share price and total return to be reduced or fluctuate more than other types of investments. This kind of market risk is generally greater for funds investing in debt securities with longer maturities.

Leverage Risk

The use of leverage, such as borrowing money to purchase securities, will cause the Fund or a Public Investment Fund or Private Real Estate Investment Fund in which the Fund has invested, to incur additional expenses and significantly magnify the Fund’s losses in the event of underperformance of the Fund’s (or Public Investment Fund’s or

Private Real Estate Investment Fund’s) underlying investments. Interest payments and fees incurred in connection with such borrowings will reduce the amount of distributions available to the Fund’s shareholders. The Fund’s investments in Public Investment Funds and REITs managed by affiliated or unaffiliated institutional asset managers may incur higher levels of leverage. Accordingly, the Fund, through these investments, may be exposed to the higher levels of leverage than the Fund is permitted to, including a greater risk of loss with respect to such investments as a result of higher leverage employed by such entities.

Liquidity Risk

There is currently no secondary market for the shares and the Fund expects that no secondary market will develop. Limited liquidity is provided to shareholders only through the Fund’s quarterly repurchase offers for no less than 5% of the shares outstanding at NAV. There is no guarantee that shareholders will be able to sell all of the shares they desire in a quarterly repurchase offer.

REIT Risk

Real estate investments trusts (“REITs”) may be affected by changes in the real estate markets generally as well as changes in the values of the properties owned by the REIT or securing the mortgages owned by the REIT. REITs are dependent upon management skill and are not diversified. REITs are also subject to heavy cash flow dependency, defaults by borrowers, self-liquidation, and the possibility of failing to qualify for special tax treatment under the Code, and to maintain an exemption under the 1940 Act. Finally, certain REITs may be self-liquidating at the end of a specified term, and run the risk of liquidating at an economically inopportune time.

Note 8. Investment Transactions

Purchases & Sales of Securities

The cost of purchases and the proceeds from sales of investments, other than short-term securities, for the six months ended June 30, 2018, were as follows:

Other Securities
Purchases	Sales
$5,042,239	$2,582,205

Semi-Annual Report 21

NOTES TO FINANCIAL STATEMENTS (continued)

June 30, 2018 NexPoint Real Estate Strategies Fund

Note 9. Affiliated Issuers

Under Section 2 (a) (3) of the Investment Company Act of 1940, as amended, a portfolio company is defined as “affiliated” if a fund owns five percent or more of its outstanding voting securities or if the portfolio company is under common control.

The table below shows affiliated issuers of the Fund as of June 30, 2018:

Issuer	Shares at December 31, 2017		Beginning Value as of December 31, 2017		Purchases at Cost		Proceeds from Sales		Net Realized Gain/(Loss) on Sales of Affiliated Issuers		Change in Unrealized Appreciation/ (Depreciation			Ending Value as of June 30, 2018		Shares at June 30, 2018		Affiliated Income
Majority Owned, Not Consolidated
NRESF REIT Sub, LLC (Common Stocks)		1,012,750	$	58,436	$	—	$	—	$	—	$	(13,267	)	$	45,169		1,012,750	$	—
Other Affiliates
NexPoint Residential Trust, Inc., REIT (Common Stocks)		19,662		549,356		36,981		—		—		12,365			598,702		21,044		10,471
Total		1,032,412	$	607,792	$	36,981	$	—	$	—	$	(902	)	$	643,871		1,033,794	$	10,471

Note 10. Significant Shareholders

The number of shareholders each owning 5% or more of the Fund is listed below. The total percentage of the Fund held by such external shareholders as well as percentage of the Fund held by certain affiliates of the Investment Adviser at June 30, 2018 were:

Number	% of Fund Held
3	62%

Investment activities of these shareholders could have a material impact on the Fund and remaining shareholders.

Note 11. New Accounting Pronouncements

In November, 2016, the FASB issued Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The amendments in this update require the statement of cash flows explain the change during the period in the total of cash, cash equivalents. Amounts generally described as restricted cash or restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. For public entities this update will be effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. For all other entities, this update is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The Investment Adviser is currently evaluating the impact of this new guidance on the Fund’s financial statements.

In December 2016, the FASB issued Accounting Standards Update 2016-19, Technical Corrections and Improvements. The amendments in this update include an amendment to

FASB ASC Topic 820, Fair Value Measurement and Disclosures to clarify the difference between a valuation approach and a valuation technique. The amendment also requires an entity to disclose when there has been a change in either or both a valuation approach and/or a valuation technique. For public entities, this update will be effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. For all other entities, this update is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The Investment Adviser is currently evaluating the impact of this new guidance on the Fund’s financial statements.

In March 2017, the FASB issued Accounting Standards Update 2017-08, Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20). The amendments in this update shorten the amortization period for certain callable debt securities held at premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public entities this update will be effective for fiscal years beginning after December 15, 2018, and for interim periods within those fiscal years. The Investment Adviser is currently evaluating the impact of this new guidance on the Fund’s financial statements.

In February 2018, the FASB issued Accounting Standards Update 2018-03, Technical Corrections and Improvements to Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update provide a variety of technical corrections and improvements

22 Semi-Annual Report

NOTES TO FINANCIAL STATEMENTS (concluded)

June 30, 2018 NexPoint Real Estate Strategies Fund

to how entities should account for financial instruments. For public entities this update will be effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years beginning after June 15, 2018. The Investment Adviser is currently evaluating the impact of this new guidance on the Fund’s financial statements.

Note 12. Subsequent Events

Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were issued, and has determined that there were no subsequent events to report which have not already been recorded or disclosed in these financial statements and accompanying notes.

Semi-Annual Report 23

ADDITIONAL INFORMATION

June 30, 2018 NexPoint Real Estate Strategies Fund

Additional Portfolio Information

The Investment Adviser and its affiliates manage other accounts, including registered and private funds and individual accounts. Although investment decisions for the Fund are made independently from those of such other accounts, the Investment Adviser may, consistent with applicable law, make investment recommendations to other clients or accounts that may be the same or different from those made to the Fund, including investments in different levels of the capital structure of a company, such as equity versus senior loans, or that involve taking contradictory positions in multiple levels of the capital structure. The Investment Adviser has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, this may create situations where a client could be disadvantaged because of the investment activities conducted by the Investment Adviser for other client accounts. When the Fund and one or more of such other accounts is prepared to invest in, or desires to dispose of, the same security, available investments or opportunities for each will be allocated in a manner believed by the Investment Adviser to be equitable to the Fund and such other accounts. The Investment Adviser also may aggregate orders to purchase and sell securities for the Fund and such other accounts. Although the Investment Adviser believes that, over time, the potential benefits of participating in volume transactions and negotiating lower transaction costs should benefit all accounts including the Fund, in some cases these activities may adversely affect the price paid or received by the Fund or the size of the position obtained or disposed of by the Fund. Where trades are aggregated, the investments or proceeds, as well as the expenses incurred, will be allocated by the Investment Adviser in a manner designed to be equitable and consistent with the Investment Adviser’s fiduciary duty to the Fund and its other clients (including its duty to seek to obtain best execution of client trades).

24 Semi-Annual Report

IMPORTANT INFORMATION ABOUT THIS REPORT

Investment Adviser

NexPoint Advisors, L.P.

300 Crescent Court, Suite 700

Dallas, TX 75201

Transfer Agent

DST Systems, Inc.

210 W 10th, 8th Floor

Kansas City, MO 64105

Custodian

State Street Bank and Trust Company

One Lincoln Street

Boston, Massachusetts 02111

Independent Registered Public Accounting Firm

KPMG LLP

Two Financial Center

60 South Street

Boston, MA 02111

Fund Counsel

Stradley Ronon Stevens & Young, LLP

1250 Connecticut Avenue, N.W.,

Suite 500

Washington, DC 20036-2652

This report has been prepared for shareholders of NexPoint Real Estate Strategies Fund (the “Fund”). The Fund mails one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-844-485-9167 to request that additional reports be sent to you.

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities, and the Fund’s proxy voting records for the most recent 12-month period ended June 30, are available (i) without charge, upon request, by calling 1-844-485-9167 and (ii) on the SEC’s website at http://www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and also may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the Public Reference Room may be obtained by calling 1-800-SEC-0330. Shareholders may also obtain the Form N-Q by visiting the Fund’s website at www.NexPointAdvisors.com.

As required by Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the Fund’s principal executive officer and principal financial officer made quarterly certifications, included in filings with the SEC on Forms N-CSR and N-Q relating to, among other things, the Fund’s disclosure controls and procedures and internal controls over financial reporting, as applicable.

The Statement of Additional Information includes additional information about the Fund’s Trustees and is available upon request without charge by calling 1-844-485-9167.

Semi-Annual Report 25

NexPoint Real Estate Strategies Fund

c/o DST Systems, Inc.

P.O. Box 219630

Kansas City, MO 64121-9630

NexPoint Real Estate Strategies Fund Semi-Annual Report, June 30, 2018

www.nexpointadvisors.com NRES-SAR-0618

Item 2. Code of Ethics.

Not applicable

Item 3. Audit Committee Financial Expert.

Not applicable

Item 4. Principal Accountant Fees and Services.

Not applicable

Item 5. Audit Committee of Listed Registrants.

Not applicable

Item 6. Investments.

(a) Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the Semi-Annual Report to Shareholders filed under Item 1 of this form.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

(a)(1) Identification of Portfolio Manager(s) or Management Team Members and Description of Role of Portfolio Manager(s) or Management Team Members

Effective April 26, 2018, Matthew Goetz became a co-portfolio manager of the NexPoint Real Estate Strategies Fund (the “Registrant”). Mr. Goetz serves as one of three portfolio managers of the Registrant.

Matthew Goetz – Mr. Goetz serves as a Director, Real Estate at NexPoint Advisors, L.P. (“NexPoint” or the “Adviser”) and Senior VP-Investments and Asset Management of NexPoint Residential Trust, Inc. since March 2015. Mr. Goetz was previously a Senior Financial Analyst at HCM from 2014 to March 2017. With over nine years of real estate, private equity and equity trading experience, his primary responsibilities are to manage assets, source acquisitions, oversee risk and develop potential business opportunities for NexPoint, including fundraising, private investments and joint ventures. Before joining Highland in June 2014, Mr. Goetz was a Senior Financial Analyst in CBRE’s Debt and Structured Finance group from May 2011 to June 2014 where he underwrote over $7 billion and more than 30 million square feet of multifamily, office, and retail commercial real estate. In his time at CBRE, a commercial real estate services firm, Mr. Goetz and his team closed over $2.5 billion in debt and equity financing. Prior to joining CBRE’s Debt and Structured Finance group, he held roles as an Analyst and Senior Analyst for CBRE’s Recovery and Restructuring Services group from September 2009 to May 2011 where he assisted in the asset management and disposition of over 3,000 real estate owned assets valued at more than $750 million. He also provided commercial real estate consulting services to banks, special servicers, hedge funds, and private equity groups.

(a)(2) Other Accounts Managed by Portfolio Manager(s) or Management Team Member and Potential Conflicts of Interest

Other Accounts Managed by Portfolio Manager(s) or Management Team Member

The following table provides information about funds and accounts, other than the Registrant, for which Mr. Goetz is primarily responsible for the day-to-day portfolio management as of June 30, 2018.

Matthew Goetz

Type of Accounts	Total # of Accounts Managed		Total Assets (millions)		# of Accounts Managed with Performance-Based Advisory Fee		Total Assets with Performance-Based Advisory Fee (millions)
Registered Investment Companies:		0	$	0		0	$	0
Other Pooled Investment Vehicles:		0	$	0		0	$	0
Other Accounts:		0	$	0		0	$	0

Potential Conflicts of Interests

The Adviser and/or its general partner, limited partners, officers, affiliates and employees provide investment advice to other parties and manage other accounts and private investment vehicles similar to the Registrant. For the purposes of this section, the term “Highland” shall include the Adviser and its affiliated investment advisors, including HCM and its affiliates. In connection with such other investment management activities, the Adviser and/or its general partner, limited partners, officers, affiliates and employees may decide to invest the funds of one or more other accounts or recommend the investment of funds by other parties, rather than the Registrant’s monies, in a particular security or strategy. In addition, the Adviser and such other persons will determine the allocation of funds from the Registrant and such other accounts to investment strategies and techniques on whatever basis they consider appropriate or desirable in their sole and absolute discretion.

Highland has built a professional working environment, a firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. Highland has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, Highland furnishes advisory services to numerous clients in addition to the Registrant, and Highland may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts that have performance or higher fees paid to Highland or in which portfolio managers have a personal interest in the receipt of such fees) that may be the same as or different from those made to the Registrant. In addition, Highland, its affiliates and any of their partners, directors, officers, stockholders or employees may or may not have an interest in the securities whose purchase and sale the Adviser recommends to the Registrant. Actions with respect to securities of the same kind may be the same as or different from the action that the Adviser, or any of its affiliates, or any of their partners,

directors, officers, stockholders or employees or any member of their families may take with respect to the same securities. Moreover, the Adviser may refrain from rendering any advice or services concerning securities of companies of which any of the Adviser’s (or its affiliates’) partners, directors, officers or employees are directors or officers, or companies as to which the Adviser or any of its affiliates or partners, directors, officers and employees of any of them has any substantial economic interest or possesses material non-public information. In addition to its various policies and procedures designed to address these issues, Highland includes disclosure regarding these matters to its clients in both its Form ADV and investment advisory agreements.

The Adviser, its affiliates or their partners, directors, officers or employees similarly serve or may serve other entities that operate in the same or related lines of business, including accounts managed by an investment adviser affiliated with the Adviser. Accordingly, these individuals may have obligations to investors in those entities or funds or to other clients, the fulfillment of which might not be in the best interests of the Registrant. As a result, the Adviser will face conflicts in the allocation of investment opportunities to the Registrant and other funds and clients. In order to enable such affiliates to fulfill their fiduciary duties to each of the clients for which they have responsibility, the Adviser will endeavor to allocate investment opportunities in a fair and equitable manner, pursuant to policies and procedures adopted by the Adviser and its advisory affiliates that are designed to manage potential conflicts of interest, which may, subject to applicable regulatory constraints, involve pro rata co-investment by the funds and such other clients or may involve a rotation of opportunities among the funds and such other clients. To mitigate any actual or perceived conflicts of interest, allocation of limited offering securities (such as IPOs and registered secondary offerings) to principal accounts that do not include third party investors may only be made after all other client account orders for the security have been filled. However, there can be no assurance that such policies and procedures will in every case ensure fair and equitable allocations of investment opportunities, particularly when considered in hindsight.

Conflicts may arise in cases when clients and/or the Adviser and other affiliated entities invest in different parts of an issuer’s capital structure, including circumstances in which one or more clients own private securities or obligations of an issuer and other clients may own public securities of the same issuer. In addition, one or more clients may invest in securities, or other financial instruments, of an issuer that are senior or junior to securities, or financial instruments, of the same issuer that are held by or acquired for, one or more other clients. For example, if such issuer encounters financial problems, decisions related to such securities (such as over the terms of any workout or proposed waivers and amendments to debt covenants) may raise conflicts of interests. In such a distressed situation, a client holding debt securities of the issuer may be better served by a liquidation of the issuer in which it may be paid in full, whereas a client holding equity securities of the issuer might prefer a reorganization that holds the potential to create value for the equity holders. In the event of conflicting interests within an issuer‘s capital structure, Highland generally will pursue the strategy that Highland believes best reflects what would be expected to be negotiated in an arm’s length transaction, but in all instances with due consideration being given to Highland’s fiduciary duties to each of its accounts (without regard to the nature of the accounts involved or fees received from such accounts). This strategy may be recommended by one or more Highland investment professionals. A single person may represent more than one part of an issuer’s capital structure. The recommended course of action will be presented to the conflicts committee for final determination as to how to proceed. Highland may elect, but is not required, to assign different teams to make recommendations for different parts of the capital structure as the conflicts committee determines in its discretion. In the event any Highland personnel serve on the board of the subject company, they generally recuse themselves from voting on any board matter with respect to a transaction that has an asymmetrical impact on the capital structure. Highland personnel board members may still make recommendations to the conflicts committee. If any such persons are also on the conflicts committee, they may recuse themselves from the committee’s determination. A portfolio manager with respect to any applicable Highland registered investment company clients (“Retail Accounts”) participates in such discussions, but makes an independent determination as to which course of action he or she determines is in the best interest of the applicable Retail Accounts. Highland may use external counsel for guidance and assistance.

The Adviser and its affiliates have both subjective and objective procedures and policies in place designed to manage potential conflicts of interest involving clients so that, for example, investment opportunities are allocated in a fair and equitable manner among the Registrant and such other clients. An investment opportunity that is suitable for multiple clients of the Adviser and its affiliates may not be capable of being shared among some or all of such clients due to the limited scale of the opportunity or other factors, including regulatory restrictions imposed by the 1940 Act. There can be no assurance that the Adviser’s or its affiliates’ efforts to allocate any particular investment opportunity fairly among all clients for whom such opportunity is appropriate will result in an allocation of all or part of such opportunity to the Registrant. Not all conflicts of interest can be expected to be resolved in favor of the Registrant.

Another type of conflict may arise if one client account buys a security and another client account sells or shorts the same security. Currently, such opposing positions are generally not permitted within the same account without prior trade approval by the Adviser’s Chief Compliance Officer. However, a portfolio manager may enter into opposing positions for different clients to the extent each such client has a different investment objective and each such position is consistent with the investment objective of the applicable client. In addition, transactions in investments by one or more affiliated client accounts may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of other client accounts.

Because certain client accounts may have investment objectives, strategies or legal, contractual, tax or other requirements that differ (such as the need to take tax losses, realize profits, raise cash, diversification, etc.), an affiliated advisor may purchase, sell or continue to hold securities for certain client accounts contrary to other recommendations. In addition, an affiliated advisor may be permitted to sell securities or instruments short for certain client accounts and may not be permitted to do so for other affiliated client accounts.

As a result of the Registrant’s arrangements with Highland, there may be times when Highland, the Adviser or their affiliates have interests that differ from those of the Registrant’s shareholders, giving rise to a conflict of interest. The Registrant’s officers serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as the Registrant does, or of investment funds managed by the Adviser or its affiliates. Similarly, the Adviser or its affiliates may have other clients with similar, different or competing investment objectives. In serving in these multiple capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may not be in the best interests of the Registrant or its shareholders. For example, the Registrant’s officers have, and will continue to have, management responsibilities for other investment funds, accounts or other investment vehicles managed or sponsored by the Adviser and its affiliates. The Registrant’s investment objective may overlap, in part or in whole, with the investment objective of such affiliated investment funds, accounts or other investment vehicles. The Adviser will seek to allocate investment opportunities among eligible accounts in a manner that is fair and equitable over time and consistent with its allocation policy. However, the Registrant can offer no assurance that such opportunities will be allocated to it fairly or equitably in the short-term or over time.

(a)(3) Compensation Structure of Portfolio Manager(s) or Management Team Members

NexPoint’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors, including the relative performance of a portfolio manager’s underlying account, the combined performance of the portfolio managers’ underlying accounts, and the relative performance of the portfolio managers’ underlying accounts measured against other employees. The principal components of compensation include a base salary, a discretionary bonus and various retirement benefits.

Base compensation. Generally, portfolio managers receive base compensation based on their seniority and/or their position with NexPoint, which may include the amount of assets supervised and other management roles within NexPoint. Base compensation is determined by taking into account current industry norms and market data to ensure that NexPoint pays a competitive base compensation.

Discretionary compensation. In addition to base compensation, portfolio managers may receive discretionary compensation, which can be a substantial portion of total compensation. Discretionary compensation can include a discretionary cash bonus paid to recognize specific business contributions and to ensure that the total level of compensation is competitive with the market.

Because each person’s compensation is based on his or her individual performance, NexPoint does not have a typical percentage split among base salary, bonus and other compensation. Senior portfolio managers who perform additional management functions may receive additional compensation in these other capacities. Compensation is structured such that key professionals benefit from remaining with NexPoint.

(a)(4) Disclosure of Securities Ownership

The following table sets forth the dollar range of equity securities beneficially owned by Mr. Goetz in the Registrant as of June 30, 2018.

Name of Portfolio Managers	Dollar Ranges of Equity Securities Beneficially Owned by Portfolio Managers
Matthew Goetz	$	10,001-$50,000

(b) Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

No such purchases were made by or on behalf of the Registrant or any “affiliated purchaser” during the period covered by this report.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which the shareholders may recommend nominees to the Registrant’s Board.

Item 11. Controls and Procedures.

(a) The Registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act (17 CFR 270.30a-3 (c)) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

(a) Not applicable.

(b) Not applicable.

Item 13. Exhibits.

(a)(1) Not applicable.

(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

(a)(3) Not applicable.

(a)(4) Not applicable.

(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NEXPOINT REAL ESTATE STRATEGIES FUND

By (Signature and Title):	/s/ James Dondero
	James Dondero
	President and Principal Executive Officer

Date:    September 5, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By (Signature and Title):	/s/ James Dondero
	James Dondero
	President and Principal Executive Officer

Date:    September 5, 2018

By (Signature and Title):	/s/ Brian Mitts
	Brian Mitts
	Executive Vice President, Principal Financial Officer and Principal Accounting Officer

Date:    September 5, 2018