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 | 811-21293 |
Nuveen Preferred Income Opportunities Fund
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive, Chicago, IL 60606
(Address of principal executive offices) (Zip code)
Gifford R. Zimmerman
Nuveen Investments
333 West Wacker Drive, Chicago, IL 60606
(Name and address of agent for service)
Registrant’s telephone number, including area code: (312) 917-7700
Date of fiscal year end: July 31
Date of reporting period: January 31, 2017
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policy making roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss.3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
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| Closed-End Funds |
| Nuveen | ||
| Closed-End Funds |
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Semi-Annual Report January 31, 2017
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| JPC | ||||||
| Nuveen Preferred Income Opportunities Fund | ||||||
| JPI | ||||||
| Nuveen Preferred and Income Term Fund | ||||||
| JPS | ||||||
| Nuveen Preferred Securities Income Fund | ||||||
| JPT | ||||||
| Nuveen Preferred and Income 2022 Term Fund | ||||||
| JPW | ||||||
| Nuveen Flexible Investment Income Fund | ||||||
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to Shareholders
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Comments
Nuveen Preferred Income Opportunities Fund (JPC)
Nuveen Preferred and Income Term Fund (JPI)
Nuveen Preferred Securities Income Fund (JPS)
Nuveen Preferred and Income 2022 Term Fund (JPT)
Nuveen Flexible Investment Income Fund (JPW)
Nuveen Asset Management, LLC (NAM) and NWQ Investment Management Company, LLC (NWQ), both affiliates of Nuveen, LLC, are sub-advisers for the Nuveen Preferred Income Opportunities Fund (JPC). NAM and NWQ each manage approximately half of the Fund’s investment portfolio. Douglas Baker, CFA and Brenda Langenfeld, CFA, are the portfolio managers for the NAM team. The NWQ income-oriented investment team is led by Thomas J. Ray, CFA and Susi Budiman, CFA. The Nuveen Preferred and Income Term Fund (JPI) features management by Nuveen Asset Management, LLC (NAM), an affiliate of Nuveen, LLC. Douglas Baker, CFA, and Brenda Langenfeld, CFA, have served as the Fund’s portfolio managers since its inception. The Nuveen Preferred Securities Income Fund (JPS) is sub-advised by a team of specialists at Spectrum Asset Management, a wholly owned subsidiary of Principal Global Investors, LLC. Mark Lieb and Phil Jacoby lead the team. The Nuveen Preferred and Income 2022 Term Fund (JPT) features management by Nuveen Asset Management, LLC (NAM), an affiliate of Nuveen, LLC. Douglas Baker, CFA, and Brenda Langenfeld, CFA, have served as the Fund’s portfolio managers since its inception. The Nuveen Flexible Investment Income Fund (JPW) features portfolio management by NWQ Investment Management Company, LLC (NWQ), an affiliate of Nuveen, LLC. Thomas J. Ray, CFA, and Susi Budiman, CFA, are the portfolio managers.
Effective January 31, 2017, JPC and JPS removed the investment policy prohibiting investment in floating rate securities.
Effective December 31, 2016, the primary and secondary benchmarks for JPC changed in order to better represent the current investible universe of preferred securities. The new primary is BofA Merrill Lynch U.S. All Capital Securities Index and new secondary Blended Benchmark is 50% BofA Merrill Lynch Fixed Rate Preferred Securities Index, 30% BofA Merrill Lynch U.S. All Capital Securities Index and 20% BofA Merrill Lynch Contingent Capital Securities USD Hedged Index. Performance for indexes that were created after the Fund’s inception are linked to the Fund’s previous benchmarks.
Effective December 31, 2016, the primary and secondary benchmarks for JPS changed in order to better represent the current investible universe of preferred securities. The new primary is BofA/Merrill Lynch U.S. All Capital Securities Index and new secondary Blended Benchmark is 60% BofA/Merrill Lynch U.S. All Capital Securities Index and 40% BofA/Merrill Lynch Contingent Capital Securities USD Hedged Index. Performance for indexes that were created after the Fund’s inception are linked to the Fund’s previous benchmarks.
Certain statements in this report are forward-looking statements. Discussions of specific investments are for illustration only and are not intended as recommendations of individual investments. The forward-looking statements and other views expressed herein are those of the portfolio managers as of the date of this report. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements and the views expressed herein are subject to change at any time, due to numerous market and other factors. The Funds disclaim any obligation to update publicly or revise any forward-looking statements or views expressed herein.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s (S&P), Moody’s Investors Service, Inc. (Moody’s) or Fitch, Inc. (Fitch). This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings, while BB, B, CCC, CC, C and D are below investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by these national rating agencies.
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
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Portfolio Managers’ Comments (continued)
On November 17, 2016, the Board of Trustees for the Funds approved a plan to merge the Nuveen Flexible Investment Income Fund (JPW) into the Nuveen Preferred Income Opportunities Fund (JPC). The merger is subject to customary conditions, including shareholder approval at the annual shareholder meeting.
Here the portfolio management teams discuss their management strategies and the performance of the Funds for the six-month reporting period ended January 31, 2017 for JPC, JPI, JPS and JPW; and for the abbreviated reporting period since the Fund’s inception on January 26, 2017 through January 31, 2017 for JPT.
What key strategies were used to manage JPC, JPI, JPS and JPW during this six-month reporting period ended January 31, 2017; and for the abbreviated reporting period since the Fund’s inception on January 26, 2017 through January 31, 2017 for JPT and how did these strategies influence performance?
Nuveen Preferred Income Opportunities Fund (JPC)
The table in the Performance Overview and Holding Summaries section of this report provides total return performance for the Fund for the six-month, one-year, five-year and ten-year periods ended January 31, 2017. For the six-month reporting period ended January 31, 2017, the Fund’s common shares at net asset value (NAV) outperformed the BofA/Merrill Lynch U.S. All Capital Securities Index, the new JPC Blended Benchmark, the old JPC Blended Benchmark and the BofA/Merrill Lynch Preferred Securities Fixed Rate Index.
JPC invests at least 80% of its managed assets in preferred securities and up to 20% opportunistically over the market cycle in other types of securities, primarily income oriented securities such as corporate and taxable municipal debt and common equity. The Fund is managed by two experienced portfolio teams with distinctive, complementary approaches to the preferred market, each managing its own “sleeve” of the portfolio. NAM employs a debt-oriented approach that combines top down relative value analysis of industry sectors with fundamental credit analysis. NWQ’s investment process identifies undervalued securities within a company’s capital structure that offer the most attractive risk/reward potential. This multi-team approach gives investors access to a broader investment universe with greater diversification potential.
Nuveen Asset Management
For the portion of the Fund managed by NAM, the Fund seeks to achieve its investment objective of providing a high level of current income and total return by investing in preferred securities and other income producing securities. The Fund’s portfolio is actively managed seeking to capitalize on strong and continuously improving credit fundamentals across NAM’s issuer base, coupled with arguably wide credit spreads (the difference between current yields on preferred securities and U.S. Treasury Bonds and other fixed income benchmarks) for the preferred security asset class. The Fund’s strategy focuses opportunistically on highly regulated industries, like utilities, banks and insurance companies, with a current emphasis broadly on financial services companies.
NAM employs a credit-based investment approach, using a top-down process to position the portfolio in a manner that reflects the investment team’s overall macro-economic outlook, while also incorporating a bottom-up approach that focuses on fundamental credit research, security structure selection, and option adjusted spread (OAS) analysis. The process begins with identifying the investable universe of $1,000 par and $25 par preferred securities. In an effort to capitalize on the inefficiencies between different investor bases within the preferred securities market, NAM tactically and strategically shifts capital between the $25 par exchange listed market and the $1,000 par over-the-counter market. Periods of volatility may drive notably different valuations between these two markets, as will periods where valuations trend in one direction or another for an extended period of time. This dynamic is often related to differences in how retail and institutional markets perceive and price risk, as well as differences in retail and institutional investors’ ability to source substitute investments. Technical factors such as new issue supply may also influence the relative valuations between $25 par exchange listed structures and $1,000 par over-the-counter structures.
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NAM continually monitors developments across the domestic and international financial markets, but NAM does not anticipate materially changing the Fund’s relative positioning strategy in the near future. NAM feels that valuations on the $25 par retail side of the market remain rich versus the $1,000 par institutional side of the market. NAM will likely maintain an overweight to $1,000 par securities as a result of this relative value opportunity, and because of NAM’s desire to position defensively against rising interest rates. Indeed, NAM has been concerned about the potential impact of rising rates on preferred security valuations for an extended period of time. Callable fixed rate coupon securities, like the majority of preferred security structures, contain an additional risk, also known as duration extension risk, which is not applicable to non-callable fixed income structures. Duration on callable fixed rate coupon securities tends to extend during periods of rising interest rates, exactly at the time when investors benefit the least from higher duration. Luckily, there are coupon structures within the preferred securities market, like floating rate, fixed-to-floating rate, and fixed-to-fixed rate coupons that do not expose investors to significant amounts of duration extension risk. Given NAM’s concern regarding the potential impact of rising interest rates on preferred security valuations, NAM favors these adjustable rate coupon structures which, all other factors remaining constant, provide a lower duration profile on day one, and almost no duration extension risk versus traditional fixed rate coupon structures. One final note, fixed-to-variable rate securities are more common on the $1,000 par side of the market, and thus another reason in addition to relative value considerations for NAM’s current, and foreseeable, overweight to $1,000 par securities relative to the new JPC Blended Benchmark.
As mentioned in previous reports, the population of “new generation” preferred and hybrid securities, such as contingent capital securities (otherwise known as CoCos), are now a meaningful presence within the preferred and hybrid security marketplace. NAM estimates the current universe of benchmark-eligible CoCo securities to be approaching almost $200 billion. As a reminder, international bank capital standards as outlined in Basel III require new Additional Tier 1 (AT1)-qualifying and Tier 2-qualifying securities to contain explicit loss absorbing features upon the breach of certain predetermined capital thresholds. These loss-absorbing features come in one of three structures: equity conversion, permanent write-down of principal, or temporary write-down of principal with the possibility of future write-up when/if the issuer were able to replenish capital levels back above the threshold trigger level. When allocating to this segment of the preferred and hybrid securities market, NAM has focused on those issuers that have meaningful capital cushions above regulatory minimum capital levels. Focusing exposure on these better capitalized issuers is designed to help minimize the likelihood of a conversion-to-equity event, principal-write-down or a skipped coupon payment. In addition to seeking out those issuers with larger capital cushions, NAM also favors those issuers that have, or have nearly, met their full regulatory requirement of AT1 securities outstanding. This is to help reduce the likelihood that future new AT1 issuance from a particular issuer might weigh on valuations of existing securities trading in the secondary market.
While the JPC sleeve managed by NAM was underweight to CoCos versus the new JPC Blended Benchmark, this does not necessarily reflect a bearish outlook for the sector. As of the end of the reporting period, JPC had an allocation of roughly 17% to CoCo securities versus nearly 40% in the blended index. The portfolio management team typically applies a ‘three-legged stool’ approach to investing in the CoCo market. The first leg of the stool is to focus on those issuers about which the credit research team has the highest conviction from a credit quality perspective. The second leg of the stool is for the portfolio management team to take the pool of high conviction credits, and to further narrow down the investable pool by focusing on issuers with the greatest capital cushions above their mandated regulatory minimum levels. This second leg of the stool is to help mitigate risk of coupon deferral and/or a contingency event. The final, third leg of the stool, is to take this pool of names and focus on the issuers that have fully, or nearly fully, issued their total amount of CoCo exposure (typically a minimum of 1.5% of a bank’s risk weighted assets) to meet regulatory capital requirements. While several issuers do indeed meet the three-legged stool test, several others only meet one or two of those three requirements, which generally leads the portfolio management team to decline to purchase. This is the primary reason for the underweight to the CoCo market during the reporting period. However, as more and more
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Portfolio Managers’ Comments (continued)
issuers meet all the requirements of the three-legged stool test, investors should anticipate increasing CoCo exposure within the Fund over time, all other factors remaining constant.
Unfortunately, during the reporting period, the underweight to the CoCo market was detrimental to relative performance versus the new JPC Blended Benchmark. The vast majority of the CoCo universe today is issued by European banks. During the reporting period, several large headlines that had been plaguing the European bank sector abated meaningfully, while headlines in the U.S., especially with respect to the unexpected presidential election results, seemingly added to risk premiums at the margin. As a result, option adjusted spreads (OAS) across the CoCo market generally decreased quite meaningfully during the reporting period, while OAS on average for U.S. securities on average increased.
As with any category within fixed income, preferred securities are not immune from the impact of rising interest rates. NAM seeks to minimize the negative impact of higher rates on the Fund by positioning in less interest rate sensitive securities, like variable rate, fixed-to-floating rate, and fixed-to-fixed rate coupon structures. However, it is also important to note that interest rates do not typically move in isolation, and credit spreads tend to have a negative correlation with the direction of interest rates. It is NAM’s experience that rising interest rates are frequently the result of an improving macro-economic landscape. In this type of environment, risk premiums should shrink, reflecting the lower risk profile of the overall market. Such credit spread compression in the preferred security asset class, if it occurs, could help mitigate the negative impact of rising interest rates.
As of January 31, 2017, NAM’s allocation to $1,000 par preferred securities was slightly overweight versus the new JPC Blended Benchmark. The Fund’s overweight to $1,000 par structures was accretive to relative performance. During the reporting period, interest rates in the U.S. spiked on the heels of the November 2016 presidential election. The new administration’s pro-growth agenda greatly revised higher investor expectations for both inflation and economic activity. Unfortunately, even before the back-up in interest rates, the $25 par side of the market was poised to underperform versus $1,000 par securities. First, even before the move higher in rates, valuations on the $25 par side of the market were arguably quite stretched, both on an absolute and relative basis. Second, the majority of less interest rate sensitive coupon structures like floating rate, fixed-to-floating rate, and fixed-to-fixed rate securities are found on the $1,000 par side of the market. These coupon structures tend to behave more defensively to rising interest rates versus traditional fixed rate coupon preferred securities, all other factors remaining constant. As a result of the difference in composition of coupon structures and relative valuations, it is not much of a surprise that the $25 par side of the market underperformed during the reporting period ended January 31, 2017.
In addition to floating rate, fixed-to-floating rate, and fixed-to-fixed rate coupon structures typically having a lower duration profile compared to traditional fixed rate coupons, all other factors remaining constant, the former also help immunize investors from duration extension risk during periods of rising interest rates. As of the beginning of the reporting period, the NAM sleeve of JPC had an effective duration of about 4.8 years versus the benchmark index at 4.2 years. However, by the end of the reporting period, the NAM sleeve of JPC had a duration of 4.82 years while the benchmark index duration had extended to 5.03 years. So while the duration of JPC’s NAM sleeve barely moved, the benchmark duration extended by 0.83 years, or an extension of almost 20%. Given NAM’s outlook for gradually rising interest rates then, the fixed-to-variable rate structures continue to be better aligned with NAM’s strategy versus traditional fixed rate coupon securities. As of the end of the reporting period, the JPC sleeve managed by NAM had an allocation of 82% to non-fixed rate coupon preferred securities, more than 10 percentage points above the blended index exposure of 70.7%.
With respect to the JPC sleeve managed by NAM, its allocation to lower investment grade and below investment grade securities is slightly higher compared to NAM’s blended benchmark index. NAM continues to believe that below investment grade securities will, over the long term, provide a more compelling risk-adjusted return profile than higher rated preferred securities. In addition, this lower rated segment of the asset class tends to exhibit lower interest rate sensitivity
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compared to higher rated security structures. As a result, this allocation also helps to express NAM’s desire to be positioned defensively against rising interest rates. Historically, lower rated securities have been sometimes overlooked by retail and institutional investors, and especially by investors with investment grade-only mandates. While lower rated preferred securities may exhibit periods of higher price volatility, NAM believes the return potential is disproportionately higher due to inefficiencies inherent in the segment. There is an important nuance to note regarding security ratings within the preferred marketplace. Preferred securities are typically rated several notches below an issuer’s senior unsecured debt rating. Consequently, in most instances, a BB rated preferred security is issued by an entity with an investment grade senior unsecured credit rating of BBB or higher. As a result, NAM does not believe that below investment grade rated preferred securities expose NAM’s investors to the same risks found in other below investment grade categories like traditional high yield bonds or senior loans.
NWQ Investment Management Company
For the portion of the Fund managed by NWQ, NWQ seeks to achieve high income and a measure of capital appreciation. While the Fund’s investments are primarily preferred securities, a portion of the Fund allows the flexibility to invest across the capital structure in any type of debt, preferred or equity securities offered by a particular company. The portfolio management team then evaluates all available investment choices within a selected company’s capital structure to determine the portfolio investment that may offer the most favorable risk-adjusted return potential. The Fund’s portfolio is constructed with an emphasis on seeking a sustainable level of income and an overall analysis for downside risk management.
The investment grade corporate bond market generated a total return as measured by the BofA/Merrill Lynch U.S. Corporate Index of -3.96% for the reporting period, with the fourth quarter 2016 being the worst quarterly return since the second quarter of 2013, driven by the increase in Treasury rates. High Yield bonds as measured by the BofA/Merrill Lynch U.S. High Yield Index finished the reporting period up 6.23%. The BofA/Merrill Lynch Fixed Rate Preferred Securities Index returned -1.55% for the reporting period. The preferred market experienced large inflows into preferred exchange-traded funds (ETFs) and demand from overseas and retail accounts during the first half of the reporting period. The rally tapered off in September 2016 as yields on preferreds became historically low and unattractive to institutional buyers. November’s election result was the next catalyst to push preferreds prices lower. Like other incoming producing assets including REITs and high dividend yield stocks, preferreds sold off with Treasury yields as markets reacted to the election of Donald Trump.
The leveraged loan market, as represented by the Credit Suisse Leveraged Loan Index, produced a return of 4.51% for the six-month reporting period. The market was boosted by increased demand as the reality of rising rates was more evident. While technicals were certainly supportive to the asset class late in the reporting period, the outlook for loans remains constructive with default rates anticipated to remain benign, and fundamentals continuing to be supportive.
During the reporting period, NWQ’s preferred, equity and high yield holdings contributed to performance, while NWQ’s investment grade corporate bonds detracted from performance. Several sectors contributed to the Fund’s performance, in particular NWQ’s holdings in the industrial, real estate and insurance sectors.
Several of NWQ’s holdings performed well during the reporting period, in particular our equity holdings. Top performers included Nordstrom, Inc. common stock. Nordstrom is a best-in-class retailer with a healthy store footprint and growing e-commerce presence. However, it is not immune to the weak bricks-and-mortar retail landscape, which has been negatively affected by the shift to e-commerce. This presented an attractive entry point, because we viewed the company as fundamentally oversold and undervalued, and we initiated a position. However, given the secular challenges and the always-volatile holiday season, we remained disciplined and exited our position, as we no longer believed that the risk/reward profile was favorable. Another top performer was CIT Group Inc. as the stock reacted to company specific events and broader market trends. The company executed on a key strategic initiative, announcing
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Portfolio Managers’ Comments (continued)
the sale of its Aircraft Leasing unit. Additionally, U.S. Bank stocks reacted positively to the results of the U.S. Presidential election, as investors grew optimistic about the prospect of a Republican administration and Congress enacting lower corporate tax rates, looser regulation of financial firms and other pro-growth policy initiatives, which will benefit CIT along with its banking peers. Lastly, Siemens AG common stock also contributed to performance. During the reporting period, the company unexpectedly raised its annual profit forecast, signaling confidence that it can ride out a slowdown in China and drop in oil.
Individual positions that detracted from performance included health care sector holdings, AstraZeneca PLC and Teva Pharmaceutical Industries Limited. AstraZeneca’s stock was weak as concerns about pharmaceutical pricing continued to pressure the industry during the fourth quarter. The company’s third quarter 2016 results were somewhat below expectations, as AstraZeneca’s largest drug, Crestor, went off patent. NWQ continues to believe the company offers compelling risk/reward from these levels as its pipeline of new drugs comes online in the next couple of years. Teva Pharmaceuticals preferred stock also detracted from performance as the company faces the loss of patent exclusivity on its largest drug, Copaxone. Nevertheless, NWQ believes the company has numerous potential positive catalysts coming in 2017 that should drive the stock off its current floor, and believe that valuation on the name has bottomed. Lastly, the preferred stock of Wells Fargo & Company also detracted from performance. NWQ first purchased the convertible preferred when the security was offering an attractive pick up in yield versus the regular straight preferred. The convertible initially rallied as S&P U.S. Preferred Stock Index announced its inclusion of this security to its Index, prompting a flurry of preferred ETFs and other preferred players to add to their holdings. The position was negatively impacted when preferreds sold off with Treasury yields as markets reacted to the election of Donald Trump.
NWQ has always been cognizant of the risk of an interest rate rise when making investment decisions, therefore, NWQ believes the Fund has been positioned to moderate potential rate impact through investments in shorter duration preferred securities such as those with higher coupon or fix-to-float structure as well as increasing exposure to other asset classes through security selection. Higher interest rates would decrease the call risk of bond holdings and conversely lower rates would increase the call risk of bond holdings, all other factors remaining constant. Effective duration would increase as interest rates rise.
During the period, the Fund wrote covered call options on common stocks to hedge equity exposure. These options had a negligible impact on performance.
Nuveen Preferred and Income Term Fund (JPI)
The table in the Performance Overview and Holding Summaries section of this report provides total return performance for the Fund for the six-month, one-year and since inception periods ended January 31, 2017. For the six-month reporting period ended January 31, 2017, the Fund’s common shares at net asset value (NAV) outperformed the BofA/Merrill Lynch U.S. All Capital Securities Index, the new JPI Blended Benchmark Index, the old JPI Blended Benchmark and the BofA/Merrill Lynch Preferred Securities Fixed Rate Index.
The Fund seeks to achieve its investment objective of providing a high level of current income and total return by investing in preferred securities and other income producing securities. The Fund’s portfolio is actively managed seeking to capitalize on strong and continuously improving credit fundamentals across our issuer base, coupled with arguably wide credit spreads (the difference between current yields on preferred securities and U.S. Treasury Bonds and other fixed income benchmarks) for the preferred security asset class. The Fund’s strategy focuses opportunistically on highly regulated industries, like utilities, banks and insurance companies, with a current emphasis broadly on financial services companies.
We employ a credit-based investment approach, using a top-down process to position the portfolio in a manner that reflects the investment team’s overall macro-economic outlook, while also incorporating a bottom-up approach that focuses on fundamental credit research, security structure selection, and option adjusted spread (OAS) analysis. The
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process begins with identifying the investable universe of $1,000 par and $25 par preferred securities. In an effort to capitalize on the inefficiencies between different investor bases within the preferred securities market, we tactically and strategically shift capital between the $25 par exchange listed market and the $1,000 par over-the-counter market. Periods of volatility may drive notably different valuations between these two markets, as will periods where valuations trend in one direction or another for an extended period of time. This dynamic is often related to differences in how retail and institutional markets perceive and price risk, as well as differences in retail and institutional investors’ ability to source substitute investments. Technical factors such as new issue supply may also influence the relative valuations between $25 par exchange listed structures and $1,000 par over-the-counter structures.
We continually monitor developments across the domestic and international financial markets, but we do not anticipate materially changing the Fund’s relative positioning strategy in the near future. We feel that valuations on the $25 par retail side of the market remain rich versus the $1,000 par institutional side of the market. We will likely maintain an overweight to $1,000 par securities as a result of this relative value opportunity, and because of our desire to position defensively against rising interest rates. Indeed, we have been concerned about the potential impact of rising rates on preferred security valuations for an extended period of time. Callable fixed rate coupon securities, like the majority of preferred security structures, contain an additional risk, also known as duration extension risk, which is not applicable to non-callable fixed income structures. Duration on callable fixed rate coupon securities tends to extend during periods of rising interest rates, exactly at the time when investors benefit the least from higher duration. Luckily, there are coupon structures within the preferred securities market, like floating rate, fixed-to-floating rate, and fixed-to-fixed rate coupons that do not expose investors to significant amounts of duration extension risk. Given our concern regarding the potential impact of rising interest rates on preferred security valuations, we favor these adjustable rate coupon structures which, all other factors remaining constant, provide a lower duration profile on day one, and almost negligible duration extension risk versus traditional fixed rate coupon structures. One final note, fixed-to-variable rate securities are more common on the $1,000 par side of the market, and thus another reason in addition to relative value considerations for our current, and foreseeable, overweight to $1,000 par securities relative to the JPI Blended Benchmark.
As mentioned in previous reports, the population of “new generation” preferred and hybrid securities, such as contingent capital securities (otherwise known as CoCos), are now a meaningful presence within the preferred and hybrid security marketplace. We estimate the current universe of benchmark-eligible CoCo securities to be approaching almost $200 billion. As a reminder, international bank capital standards as outlined in Basel III require new Additional Tier 1 (AT1)-qualifying and Tier 2-qualifying securities to contain explicit loss absorbing features upon the breach of certain predetermined capital thresholds. These loss-absorbing features come in one of three structures: equity conversion, permanent write-down of principal, or temporary write-down of principal with the possibility of future write-up when/if the issuer were able to replenish capital levels back above the threshold trigger level. When allocating to this segment of the preferred and hybrid securities market, NAM has focused on those issuers that have meaningful capital cushions above regulatory minimum capital levels. Focusing exposure on these better capitalized issuers is designed to help minimize the likelihood of a conversion-to-equity event, a principal write-down or a skipped coupon payment. In addition to seeking out those issuers with larger capital cushions, we also favor those issuers that have, or have nearly, met their full regulatory requirement of AT1 securities outstanding. This is to help reduce the likelihood that future new AT1 issuance from a particular issuer might weigh on valuations of existing securities trading in the secondary market.
While JPI was underweight to CoCos versus the JPI Blended Benchmark, this does not necessarily reflect a bearish outlook for the sector. As of the end of the reporting period, JPI had an allocation of roughly 17% to CoCo securities versus nearly 40% in the blended index. The portfolio management team typically applies a ‘three-legged stool’ approach to investing in the CoCo market. The first leg of the stool is to focus on those issuers about which the credit research team has the highest conviction from a credit quality perspective. The second leg of the stool is for the portfolio management team to take the pool of high conviction credits, and to further narrow down the investable pool by focusing on issuers with the greatest capital cushions above their mandated regulatory minimum levels. This second leg of the
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Portfolio Managers’ Comments (continued)
stool is to help mitigate risk of coupon deferral and/or a contingency event. The final, third leg of the stool, is to take this pool of names and from focus on the issuers that have fully, or nearly fully, issued their total amount of CoCo exposure (typically a minimum of 1.5% of a bank’s risk weighted assets) to meet regulatory capital requirements. While several issuers do indeed meet the three-legged stool test, several others only meet one or two of those three requirements, which generally leads the portfolio management team to decline to purchase. This is the primary reason for the underweight to the CoCo market during the reporting period. However, as more and more issuers meet all the requirements of the three-legged stool test, investors should anticipate increasing CoCo exposure within the strategy over time, all other factors remaining constant.
Unfortunately, during the reporting period, the underweight to the CoCo market was detrimental to relative performance versus the new JPI Blended Benchmark. The vast majority of the CoCo universe today is issued by European banks. During the reporting period, several large headlines that had been plaguing the European bank sector abated meaningfully, while headlines in the U.S., especially with respect to the unexpected presidential election results, seemingly added to risk premiums at the margin. As a result, option adjusted spreads (OAS) across the CoCo market generally decreased quite meaningfully during the reporting period, while OAS on average for U.S. securities on average increased.
As with any category within fixed income, preferred securities are not immune from the impact of rising interest rates. We seek to minimize the negative impact of higher rates on the Fund by positioning in less interest rate sensitive securities, like variable rate, fixed-to-floating rate, and fixed-to-fixed rate coupon structures. However, it is also important to note that interest rates do not typically move in isolation, and credit spreads tend to have a negative correlation with the direction of interest rates. It is our experience that rising interest rates are frequently the result of an improving macro-economic landscape. In this type of environment, risk premiums should shrink, reflecting the lower risk profile of the overall market. Such credit spread compression in the preferred security asset class, if it occurs, could help mitigate the negative impact of rising interest rates.
As of January 31, 2017, our allocation to $1,000 par preferred securities was slightly overweight versus the JPI Blended Benchmark. The Fund’s overweight to $1,000 par structures was accretive to relative performance. During the reporting period, interest rates in the U.S spiked on the heels of the November 2016 presidential election. The new administration’s pro-growth agenda greatly revised higher investor expectations for both inflation and economic activity. Unfortunately, even before the back-up in interest rates, generically the $25 par side of the market was poised to underperform versus $1,000 par securities. First, even before the move higher in rates, valuations on the $25 par side of the market were arguably quite stretched, both on an absolute and relative basis. Second, the majority of less interest rate sensitive coupon structures like floating rate, fixed-to-floating rate, and fixed-to-fixed rate securities are found on the $1,000 par side of the market. These coupon structures tend to behave more defensively to rising interest rates versus traditional fixed rate coupon preferred securities, all other factors remaining constant. As a result of the difference in composition of coupon structures and relative valuations, it is not much of a surprise that the $25 par side of the market underperformed during the reporting period ended January 31, 2017.
In addition to floating rate, fixed-to-floating rate, and fixed-to-fixed rate coupon structures typically having a lower duration profile compared to traditional fixed rate coupons, all other factors remaining constant, the former also help immunize investors from duration extension risk during periods of rising interest rates. As of the beginning of the reporting period, JPI had an effective duration of about 4.8 years versus the benchmark index at 4.2 years. However, by the end of the reporting period, JPI had a duration of 4.83 years while the benchmark index duration had extended to 5.03 years. So while the duration of JPI barely moved during the reporting period, the benchmark duration extended by 0.83 years, or an extension of almost 20%. Given our outlook for gradually rising interest rates then, the fixed-to-variable rate structures continue to be better aligned with our strategy versus traditional fixed rate coupon securities. As of the end of the reporting period, JPI had an allocation of about 83% to non-fixed rate coupon preferred securities, more than 10 percentage points above the blended index exposure of 70.7%.
| 12 | NUVEEN |
With respect to JPI, its allocation to lower investment grade and below investment grade securities is slightly higher compared to its blended benchmark index. We continue to believe that below investment grade securities will, over the long term, provide a more compelling risk-adjusted return profile than higher rated preferred securities. In addition, this lower rated segment of the asset class tends to exhibit lower interest rate sensitivity compared to higher rated security structures. As a result, this allocation also helps to express our desire to be positioned defensively against rising interest rates. Historically, lower rated securities have been sometimes overlooked by retail and institutional investors, and especially by investors with investment grade-only mandates. While lower rated preferred securities may exhibit periods of higher price volatility, we believe the return potential is disproportionately higher due to inefficiencies inherent in the segment. There is an important nuance to note regarding security ratings within the preferred marketplace. Preferred securities are typically rated several notches below an issuer’s senior unsecured debt rating. Consequently, in most instances, a BB rated preferred security is issued by an entity with an investment grade senior unsecured credit rating of BBB or higher. As a result, we do not believe that below investment grade rated preferred securities expose our investors to the same risks found in other below investment grade categories like traditional high yield bonds or senior loans.
Nuveen Preferred Securities Income Fund (JPS)
The table in the Performance Overview and Holding Summaries section of this report provide total return performance for the Fund for the six-month, one-year, five-year and ten-year periods ended January 31, 2017. For the six-month reporting period ended January 31, 2017, the Fund’s common shares at net asset value (NAV) outperformed the BofA/Merrill Lynch U.S. All Capital Securities Index, the new JPS Blended Benchmark, the old JPS Blended Benchmark and the Bloomberg Barclays U.S. Aggregate Bond Index.
The investment objective of the Fund is to seek high current income consistent with capital preservation with a secondary objective to enhance portfolio value relative to the broad market for preferred securities. Under normal market conditions, the Fund seeks to invest at least 80% of its net assets in preferred securities and up to 20% of its net assets in debt securities, including convertible debt and convertible preferred securities.
Our broad strategy during the reporting period was to reduce the negative convexity risk in the Fund’s portfolio. Negative convexity is a term that refers to a declining rate of price change as interest rates decline. This can happen on a preferred security when its call option goes into-the-money when its yield declines, which in turn, makes its modified duration appear less risky. When these in-the-money options go out-of-the-money, the reverse can happen, which extends duration resulting in higher price risk. The sector of the preferred securities market with the most negative convexity is the $25 par sector (represented in materiality by the passive exchange-traded funds in preferred and hybrid securities).
One of our primary tactics has been to reduce the $25 par concentration in the Fund in favor of the contingent capital securities (otherwise known as CoCos) sector of preferred and hybrid securities. As mentioned in previous reports, CoCos contain explicit loss absorbing features upon the breach of certain predetermined capital thresholds. These loss-absorbing features come in one of three structures: equity conversion, permanent write-down of principal, or temporary write-down of principal with the possibility of future write-up when/if the issuer were able to replenish capital levels back above the threshold trigger level. The rotational trade from $25 par preferreds to CoCos eliminates negative convexity, (which relates to the tendency of a security’s interest rate risk to increase as market interest rates rise), generally picks up yield and adds opportunity for book yield to increase if the term structure of interest rates rises. Overall, we have a risk-averse orientation toward security structure and portfolio structure, which is in keeping with our efforts to preserve capital and provide attractive income relative to senior corporate credit. The $25 par sector represents approximately 16% of the Fund, while the CoCo sector represents 35%, both sectors are underweight the benchmark by roughly 11% and 5%, respectively. The Fund’s overweight is concentrated in the U.S. financial and global non-financial $1,000 par capital securities sector of the preferred and hybrid securities universe. The Fund’s below investment grade concentration decreased slightly from the prior period. The floating-rate and variable-rate (i.e., resettable fixed rate) positioning represents 78% of the Fund, which serves overall objective of income and capital preservation of the fund as coupon payments can increase as interest rates rise and moderates the Fund’s duration to be an average of 5.3 years.
| NUVEEN | 13 |
Portfolio Managers’ Comments (continued)
During the reporting period, the U.S. Federal Reserve Bank raised its target funds rate by 25 basis points in December 2016. There was also sharp correction in the $25 par sector of the market due to a very rapid rise in the U.S. 30-year Treasury rate and the over-bought value of the retail sector by the end of the summer of 2016. The CoCo sector led all other sectors of the preferred and hybrid securities market given the constructive regulatory changes in non-U.S. bank capital requirements relative to Tier (Pillar) 2 capital. The CoCo sector received some good fundamental news through regulatory changes during the summer of 2016 whereby coupon payments should gain more certainty because the capital that European Union (EU) member banks will be required to hold in order to pay the coupons was reduced. This change by the European Central Bank gives the EU banks more cushion to absorb losses before a capital trigger can begin to limit the maximum distributable amounts. A more recent development also in favor of reduced CoCo risk is a proposal for adoption by the EU’s capital directives to set CoCo payments in an objective priority over common stock dividends rather than to subjectively co-mingle the maximum distributable amounts into the same basket. News of this new rule came late in the reporting period and helped propel the CoCo sector higher, while the rest of the preferred securities market declined in sympathy to the post U.S. election bond markets. Some of the Fund’s top performing holdings this reporting period include CoCo sector holdings Lloyds Banking Group PLC 7.5% (CoCo) and HSBC Holdings PLC 6.875% (CoCo). Also positively contributing to performance were Catlin Insurance floaters. The underperformers for the reporting period include PNC’s 6.125% $25 par, Metlife 9.125% capital security and Wells Fargo 7.5% fixed-rate preferred security.
Nuveen Preferred and Income 2022 Term Fund (JPT)
The table in the Performance Overview and Holding Summaries section of this report provides total return performance for the Fund for the abbreviated period since its inception on January 26, 2017 and the reporting period ended January 31, 2017. For abbreviated reporting period ended January 31, 2017, the Fund’s shares at net asset value (NAV) underperformed the BofA/Merrill Lynch U.S. All Capital Securities Index.
The Fund seeks to provide high current income and total return from a portfolio of primarily preferred securities. The Fund provides access to both the exchange-traded and over-the-counter preferred securities markets, seeking to capitalize on price discrepancies that may occur between these two markets. The Fund also has the flexibility to opportunistically invest in preferred securities with various coupon structures including fixed-to-floating structures, which may help reduce interest rate risk and enhance performance in a rising rate environment. The Fund invests at least 80% of its managed assets in preferred and other income-producing securities. The Fund may invest without limit in below investment grade securities but no more than 10% in securities rated below B-/B3 at the time of investment. Up to 40% of its managed assets may be in securities issued by companies located anywhere in the world, but no more than 10% in securities of issuers in emerging market countries, and 100% in U.S. dollar-denominated securities. The Fund does not invest in contingent capital securities (otherwise known as CoCos).
During the five days the Fund was in existence during the reporting period, we began the invest up of the Fund. The invest up is proceeding and we look forward to reporting in detail in future reports.
Nuveen Flexible Investment Income Fund (JPW)
The table in the Performance Overview and Holding Summaries section of this report provides total return performance for the Fund for the six-month, one-year and since inception periods ended January 31, 2017. For the six-month reporting period ended January 31, 2017, the Fund’s common shares at net asset value (NAV) outperformed the Bloomberg Barclays U.S. Aggregate Bond Index.
JPW invests at least 80% of its managed assets in income producing preferred, debt and equity securities issued by companies located anywhere in the world. Up to 50% of its managed assets may be in securities issued by non-U.S. companies, though all (100%) Fund assets will be in U.S. dollar-denominated securities. Up to 40% of its managed assets may consist of equity securities, not including preferred securities. Up to 75% of investments in debt and
| 14 | NUVEEN |
preferred securities that are of a type customarily rated by a credit rating agency, may be rated below investment grade, or if unrated, will be judged to be of comparable quality by NWQ. The Fund will invest at least 25% in securities issued by financial services companies.
The Fund’s investment objectives are to provide high current income and, secondarily, capital appreciation. The Fund seeks to achieve its investment objectives by investing in undervalued securities with attractive investment characteristics. The Fund’s portfolio is actively managed by NWQ and has the flexibility to invest across the capital structure in any type of debt, preferred or equity securities offered by a particular company. The portfolio management team then evaluates all available investment choices within a selected company’s capital structure to determine the portfolio investment that may offer the most favorable risk-adjusted return potential. The Fund’s portfolio is constructed with an emphasis on seeking a sustainable level of income and an overall analysis for downside risk management.
The investment grade corporate bond market, as measured by the BofA/Merrill Lynch U.S. Corporate Index posted a return of -3.96% for the reporting period, with the fourth quarter 2016 being the worst quarterly return since the second quarter of 2013, driven by the increase in Treasury rates. High Yield bonds, as measured by the BofA/Merrill Lynch U.S. High Yield Index, finished the reporting period up 6.23%. The BofA/Merrill Lynch Fixed Rate Preferred Securities Index returned -1.55% for the reporting period. The preferred market experienced large inflows into preferred exchange-traded funds and demand from overseas and retail accounts during the first half of the reporting period. The rally tapered off in September 2016 as yields on preferreds became historically low and unattractive to institutional buyers. November’s election result was the next catalyst to push preferreds prices lower. Like other incoming producing assets including REITs and high dividend yield stocks, preferreds sold off with Treasury yields as markets reacted to the election of Donald Trump.
The leveraged loan market, as represented by the Credit Suisse Leveraged Loan Index, produced returns of 4.51% for the six-month reporting period. The market was boosted by increased demand as the reality of rising rates was more evident and LIBOR returned to a level where much of the asset class was once again floating as floors were broadly crested. While technicals were certainly supportive to the asset class late in the period, the outlook for loans remains constructive with default rates anticipated to remain benign, and fundamentals continuing to be supportive.
During the reporting period, our preferred, equity and high yield holdings contributed to performance, while our investment grade corporate bonds detracted from performance. Several sectors contributed to the Fund’s performance, in particular our holdings in the industrial, reals estate and insurance sectors.
Several of our holdings performed well during the reporting period, in particular our equity holdings. Top performers included Nordstrom, Inc. common stock. Nordstrom is a best-in-class retailer with a healthy store footprint and growing e-commerce presence. However, it is not immune to the weak bricks-and-mortar retail landscape, which has been negatively affected by the shift to e-commerce. This presented an attractive entry point, because we viewed the company as fundamentally oversold and undervalued, and we initiated a position. However, given the secular challenges and the always-volatile holiday season, we remained disciplined and exited our position, as we no longer believed that the risk/reward profile was favorable. Another top performer was CIT Group Inc. as the stock reacted to company specific events and broader market trends. The company executed on a key strategic initiative in the quarter, announcing the sale of its Aircraft Leasing unit for a price that is accretive to the overall franchise. Additionally, U.S. Bank stocks reacted positively to the results of the U.S. Presidential election, as investors grew optimistic about the prospect of a Republican administration and Congress enacting lower corporate tax rates, looser regulation of financial firms, and other pro-growth policy initiatives, which will benefit CIT along with its banking peers. Lastly, Siemens AG common stock also contributed to performance. During the reporting period, the company unexpectedly raised its annual profit forecast, signaling confidence that it can ride out a slowdown in China and drop in oil.
Individual positions that detracted from performance included health care sector holdings, AstraZeneca PLC and Teva Pharmaceutical Industries. AstraZeneca’s stock was weak as concerns about pharmaceutical pricing continued to pressure
| NUVEEN | 15 |
Portfolio Managers’ Comments (continued)
the industry during the fourth quarter. The company’s third quarter 2016 results were somewhat below expectations, as AstraZeneca’s largest drug, Crestor, went off patent. We continue to believe the company offers compelling risk/reward from these levels as its pipeline of new drugs come online in the next couple of years. Teva Pharmaceuticals preferred stock also detracted from performance as the company faces the loss of patent exclusivity on its largest drug. Nevertheless, we believe the company has numerous potential positive catalysts coming in 2017 that should drive the stock off its current floor, and believe that valuation on the name has bottomed. Lastly, the common stock of StoneMor Partners LP also detracted. StoneMor Partners LP operates cemeteries, including selling burial lots, lawn and mausoleum crypts, cremation niches and perpetual care. The weak performance during the reporting period was due to the announcement that the company is “temporarily” reducing its quarterly distribution from $0.66 to $0.33 to conserve cash as it enters year two in its struggle to turn around its sales force. The timing and magnitude of this cut was a negative surprise. We eliminated this position as we feel the turnaround effort in its sales force may continue to drag on performance.
During the period, the Fund wrote covered call options on common stocks to hedge equity exposure. These options had a negative impact on performance.
| 16 | NUVEEN |
Leverage
IMPACT OF THE FUNDS’ LEVERAGE STRATEGIES ON PERFORMANCE
One important factor impacting the returns of JPC, JPI, JPS and JPW relative to their comparative benchmarks was the Funds’ use of leverage through the use of bank borrowings and for JPS the use of reverse repurchase agreements. The Funds use leverage because our research has shown that, over time, leveraging provides opportunities for additional income and total return for common shareholders. However, use of leverage also can expose common shareholders to additional volatility. For example, as the prices of securities held by a Fund decline, the negative impact of these valuation changes on common share NAV and common shareholder total return is magnified by the use of leverage. Conversely, leverage may enhance common share returns during periods when the prices of securities held by a Fund generally are rising. The Funds’ use of leverage had a positive impact on performance during this reporting period.
JPC, JPI and JPS continued to utilize forward starting interest rate swap contracts to partially hedge the interest cost of leverage, which as mentioned previously, is through the use of bank borrowings. During this reporting period, these swap contracts contributed to overall Fund performance.
As of January 31, 2017, the Funds’ percentages of leverage are shown in the accompanying table.
| JPC | JPI | JPS | JPW | |||||||||||||
| Effective Leverage* |
28.73 | % | 28.83 | % | 32.40 | % | 28.67 | % | ||||||||
| Regulatory Leverage* |
28.73 | % | 28.83 | % | 28.74 | % | 28.67 | % | ||||||||
| * | Effective leverage is a Fund’s effective economic leverage, and includes both regulatory leverage and the leverage effects of certain derivative and other investments in a Fund’s portfolio that increase the Fund’s investment exposure. Regulatory leverage consists of preferred shares issued or borrowings of a Fund. A Fund, however, may from time to time borrow on a typically transient basis in connection with its day-to-day operations, primarily in connection with the need to settle portfolio trades. Such incidental borrowings are excluded from the calculation of a Fund’s effective leverage ratio. Both of these are part of the Fund’s capital structure. Regulatory leverage is subject to asset coverage limits set forth in the Investment Company Act of 1940. |
THE FUNDS’ LEVERAGE
Bank Borrowings
As noted above, the Funds employ regulatory leverage through the use of bank borrowings. The Funds’ bank borrowing activities are as shown in the accompanying table.
| Current Reporting Period | Subsequent to the Close of the Reporting Period |
|||||||||||||||||||||||||||||||||||
| Fund | August 1, 2016 | Draws | Paydowns | January 31, 2017 | Average Balance Outstanding |
Draws | Paydowns | March 29, 2017 | ||||||||||||||||||||||||||||
| JPC |
$ | 404,100,000 | $ | — | $ | — | $ | 404,100,000 | $ | 404,100,000 | $ | — | $ | — | $ | 404,100,000 | ||||||||||||||||||||
| JPI |
$ | 225,000,000 | $ | — | $ | — | $ | 225,000,000 | $ | 225,000,000 | $ | — | $ | — | $ | 225,000,000 | ||||||||||||||||||||
| JPS |
$ | 945,000,000 | $ | 1,900,000 | $ | (150,000,000 | ) | $ | 796,900,000 | $ | 842,644,022 | $ | — | $ | — | $ | 796,900,000 | |||||||||||||||||||
| JPT |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | 42,500,000 | $ | — | $ | 42,500,000 | ||||||||||||||||||||
| JPW |
$ | 27,000,000 | $ | — | $ | — | $ | 27,000,000 | $ | 27,000,000 | $ | — | $ | — | $ | 27,000,000 | ||||||||||||||||||||
Refer to Notes to Financial Statements, Note 8 – Fund Leverage for further details.
Reverse Repurchase Agreements
As noted above, JPS utilized reverse repurchase agreements. The Fund’s transactions in reverse repurchase agreements are as shown in the accompanying table.
| Current Reporting Period | Subsequent to the Close of the Reporting Period |
|||||||||||||||||||||||||||||||||
| August 1, 2016 | Purchases | Sales | January 31, 2017 | Average Balance Outstanding |
Purchases | Sales | March 29, 2017 | |||||||||||||||||||||||||||
| $ | — | $ | 150,000,000 | $ | — | $ | 150,000,000 | $ | 150,000,000 | $ | — | $ | — | $ | 150,000,000 | |||||||||||||||||||
| NUVEEN | 17 |
Information
JPC, JPI, JPS AND JPT COMMON SHARE DISTRIBUTION INFORMATION
The following information regarding JPC’s, JPI’s and JPS’s distributions is as of January 31, 2017. Each Fund’s distribution levels may vary over time based on each Fund’s investment activity and portfolio investment value changes.
During the current reporting period, each Fund’s distributions to common shareholders were as shown in the accompanying table.
| Per Common Share Amounts | ||||||||||||
| Monthly Distributions (Ex-Dividend Date) | JPC | JPI | JPS | |||||||||
| August 2016 |
$ | 0.0670 | $ | 0.1625 | $ | 0.0620 | ||||||
| September |
0.0670 | 0.1625 | 0.0620 | |||||||||
| October |
0.0670 | 0.1625 | 0.0620 | |||||||||
| November |
0.0670 | 0.1625 | 0.0620 | |||||||||
| December |
0.0640 | 0.1505 | 0.0620 | |||||||||
| January 2017 |
0.0640 | 0.1505 | 0.0620 | |||||||||
| Total Distributions from Net Investment Income |
$ | 0.3960 | $ | 0.9510 | $ | 0.3720 | ||||||
| Current Distribution Rate* |
7.74 | % | 7.60 | % | 7.73 | % | ||||||
| * | Current distribution rate is based on the Fund’s current annualized monthly distribution divided by the Fund’s current market price. The Fund’s monthly distributions to its shareholders may be comprised of ordinary income, net realized capital gains and, if at the end of the fiscal year the Fund’s cumulative net ordinary income and net realized gains are less than the amount of the Fund’s distributions, a return of capital for tax purposes. |
JPC, JPI and JPS seek to pay regular monthly dividends out of their net investment income at a rate that reflects their past and projected net income performance. To permit each Fund to maintain a more stable monthly dividend, the Fund may pay dividends at a rate that may be more or less than the amount of net income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it will hold the excess in reserve as undistributed net investment income (UNII) as part of the Fund’s net asset value. Conversely, if a Fund has cumulatively paid in dividends more than it has earned, the excess will constitute a negative UNII that will likewise be reflected in the Fund’s net asset value. Each Fund will, over time, pay all its net investment income as dividends to shareholders.
As of January 31, 2017, JPC, JPI and JPS had positive UNII balances, based upon our best estimate, for tax purposes. JPC and JPI had negative UNII balances while JPS had a positive UNII balance for financial reporting purposes.
All monthly dividends paid by JPC, JPI and JPS during the current reporting period, were paid from net investment income. If a portion of the Funds’ monthly distributions were sourced from or comprised of elements other than net investment income, including capital gains and/or a return of capital, shareholders would have received a notice to that effect. For financial reporting purposes, the composition and per share amounts of each Fund’s dividends for the reporting period are presented in this report’s Statement of Changes in Net Assets and Financial Highlights, respectively. For income tax purposes, distribution information for each Fund as of its most recent tax year end is presented in Note 6 – Income Tax Information within the Notes to Financial Statements of this report.
On February 16, 2017 (subsequent to the close of this reporting period), JPT declared its initial distribution of $0.1275 per share to shareholders, payable in April 2017.
| 18 | NUVEEN |
JPW DISTRIBUTION INFORMATION
The following information regarding JPW’s distributions is current as of January 31, 2017.
The Fund has a cash flow-based distribution program. Under this program, the Fund seeks to maintain an attractive and stable regular distribution based on the Fund’s net cash flow received from its portfolio investments. Fund distributions are not intended to include expected portfolio appreciation; however, the Fund invests in securities that make payments which ultimately may be fully or partially treated as gains or return of capital for tax purposes. This tax treatment will generally “flow through” to the Fund’s distributions, but the specific tax treatment is often not known with certainty until after the end of the Fund’s tax year. As a result, regular distributions throughout the year are likely to be re-characterized for tax purposes as either long-term gains (both realized and unrealized), or as a non-taxable return of capital.
The figures in the table below provide an estimate as of January 31, 2017 of the sources (for tax purposes) of the Fund’s distributions. These source estimates include amounts currently estimated to be attributable to realized gains and/or returns of capital. The Fund attributes these non-income sources equally to each regular distribution throughout the fiscal year. The estimated information shown below is for the distributions paid on common shares for all prior months in the current fiscal year. These estimates should not be used for tax reporting purposes, and the distribution sources may differ for financial reporting than for tax reporting. The final determination of the tax characteristics of all distributions paid in 2017 will be made in early 2018 and reported to you on Form 1099-DIV. More details about the tax characteristics of the Fund’s distributions are available on www.nuveen.com/CEFdistributions.
Data as of January 31, 2017
| Current Month Estimated Percentage of Distributions |
Fiscal YTD Estimated Per Share Amounts |
|||||||||||||||||||||||||||
| Net Investment Income |
Realized Gains |
Return of Capital |
Total Distributions |
Net Investment Income |
Realized Gains |
Return of Capital |
||||||||||||||||||||||
| 82.1% | 15.8% | 2.1% | $0.6780 | $0.5565 | $0.1070 | $0.0145 | ||||||||||||||||||||||
The following table provides information regarding Fund distributions and total return performance over various time periods. This information is intended to help you better understand whether Fund returns for the specified time periods were sufficient to meet Fund distributions.
Data as of January 31, 2017
| Annualized | Cumulative | |||||||||||||||||||||||||||
| Inception Date |
Latest Monthly Per Share Distribution |
Current Distribution on NAV |
1-Year Return on NAV |
Since Inception Return on NAV |
Calendar YTD Distributions on NAV |
Calendar YTD Return on NAV |
||||||||||||||||||||||
| 6/25/2013 | $0.1130 | 7.47% | 19.19% | 7.15% | 0.62% | 1.74% | ||||||||||||||||||||||
COMMON SHARE REPURCHASES
During August 2016, the Funds’ Board of Trustees reauthorized an open-market share repurchase program, allowing JPC, JPI, JPS and JPW to repurchase an aggregate of up to approximately 10% of its outstanding shares.
As of January 31, 2017, and since the inception of the Funds’ repurchase programs, the Funds have cumulatively repurchased and retired their outstanding common shares as shown in the accompanying table.
| JPC | JPI | JPS | JPW | |||||||||||||
| Common shares cumulatively repurchased and retired |
2,826,100 | 0 | 0 | 6,500 | ||||||||||||
| Common shares authorized for repurchase |
9,690,000 | 2,275,000 | 12,040,000 | 370,000 | ||||||||||||
| NUVEEN | 19 |
Common Share Information (continued)
During the current reporting period, the Funds did not repurchase any of their outstanding common shares.
OTHER COMMON SHARE INFORMATION
As of January 31, 2017, and during the current reporting period, the Funds’ common share prices were trading at a premium/(discount) to their common share NAVs as shown in the accompanying table.
| JPC | JPI | JPS | JPT* | JPW | ||||||||||||||||
| Common share NAV |
$ | 10.34 | $ | 24.40 | $ | 9.69 | $ | 24.52 | $ | 18.16 | ||||||||||
| Common share price |
$ | 9.92 | $ | 23.77 | $ | 9.62 | $ | 24.90 | $ | 16.94 | ||||||||||
| Premium/(Discount) to NAV |
(4.06 | )% | (2.58 | )% | (0.72 | )% | 1.55 | % | (6.72 | )% | ||||||||||
| 6-month average premium/(discount) to NAV |
(5.02 | )% | (2.09 | )% | (3.30 | )% | 1.18 | % | (8.83 | )% | ||||||||||
| * | For the period January 26, 2017 (commencement of operations) through January 31, 2017. |
| 20 | NUVEEN |
Considerations
Fund shares are not guaranteed or endorsed by any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation.
Nuveen Preferred Income Opportunities Fund (JPC)
Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Lower credit debt securities may be more likely to fail to make timely interest or principal payments. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. Certain types of preferred or debt securities with special loss absorption provisions, such as contingent capital securities (CoCos), may be or become so subordinated that they present risks equivalent to, or in some cases even greater than, the same company’s common stock. These loss absorption features work to the benefit of the security issuer, not the investor. These and other risk considerations such as concentration and foreign securities risk are described in more detail on the Fund’s web page at www.nuveen.com/JPC.
Nuveen Preferred and Income Term Fund (JPI)
Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Lower credit debt securities may be more likely to fail to make timely interest or principal payments. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. Certain types of preferred or debt securities with special loss absorption provisions, such as contingent capital securities (CoCos), may be or become so subordinated that they present risks equivalent to, or in some cases even greater than, the same company’s common stock. These loss absorption features work to the benefit of the security issuer, not the investor. For these and other risks, including the Fund’s limited term and concentration risk, see the Fund’s web page at www.nuveen.com/JPI.
Nuveen Preferred Securities Income Fund (JPS)
Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a Fund’s leverage strategy will be successful. Certain types of preferred or debt securities with special loss absorption provisions, such as contingent capital securities (CoCos), may be or become so subordinated that they present risks equivalent to, or in some cases even greater than, the same company’s common stock. These loss absorption features work to the benefit of the security issuer, not the investor. These and other risks such as concentration and foreign securities risk are described in more detail on the Fund’s web page at www.nuveen.com/JPS.
| NUVEEN | 21 |
Risk Considerations (continued)
Nuveen Preferred and Income 2022 Term Fund (JPT)
Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Lower credit debt securities may be more likely to fail to make timely interest or principal payments. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. For these and other risks, including the Fund’s limited term and concentration risk, see the Fund’s web page at www.nuveen.com/JPT.
Nuveen Flexible Investment Income Fund (JPW)
Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Lower credit debt securities may be more likely to fail to make timely interest or principal payments. Prices of equity securities may decline significantly over short or extended periods of time. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. Certain types of preferred or debt securities with special loss absorption provisions, such as contingent capital securities (CoCos), may be or become so subordinated that they present risks equivalent to, or in some cases even greater than, the same company’s common stock. These loss absorption features work to the benefit of the security issuer, not the investor. For these and other risks such as concentration and foreign securities risk, please see the Fund’s web page at www.nuveen.com/JPW.
| 22 | NUVEEN |
THIS PAGE INTENTIONALLY LEFT BLANK
| NUVEEN | 23 |
JPC
Nuveen Preferred Income Opportunities Fund
Performance Overview and Holding Summaries as of January 31, 2017
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
Average Annual Total Returns as of January 31, 2017
| Cumulative | Average Annual | |||||||||||||||
| 6-Month | 1-Year | 5-Year | 10-Year | |||||||||||||
| JPC at Common Share NAV | 2.00% | 11.83% | 10.69% | 5.08% | ||||||||||||
| JPC at Common Share Price | (1.01)% | 15.12% | 12.21% | 5.68% | ||||||||||||
| BofA Merrill Lynch U.S. All Capital Securities Index | (0.13)% | 6.38% | 7.77% | 3.55% | ||||||||||||
| JPC Blended Benchmark (New Blended Benchmark) | 0.43% | 6.83% | 6.51% | 3.68% | ||||||||||||
| BofA/Merrill Lynch Preferred Securities Fixed Rate Index | (1.55)% | 5.07% | 6.53% | 2.96% | ||||||||||||
| JPC Blended Benchmark (Old Blended Benchmark) | (1.46)% | 5.28% | 6.63% | 3.73% | ||||||||||||
Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.
Common Share Price Performance — Weekly Closing Price
| 24 | NUVEEN |
This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings, while BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by these national rating agencies.
| 1 | Includes 1.7% (as a percentage of total investments) in emerging market countries. |
| NUVEEN | 25 |
JPI
Nuveen Preferred and Income Term Fund
Performance Overview and Holding Summaries as of January 31, 2017
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
Average Annual Total Returns as of January 31, 2017
| Cumulative | Average Annual | |||||||||||
| 6-Month | 1-Year | Since Inception |
||||||||||
| JPI at Common Share NAV | 3.11% | 10.25% | 9.29% | |||||||||
| JPI at Common Share Price | 0.58% | 9.02% | 8.06% | |||||||||
| BofA/Merrill Lynch U.S. All Capital Securities Index | (0.13)% | 6.38% | 7.53% | |||||||||
| JPI Blended Benchmark (New Blended Benchmark) | 2.43% | 8.59% | 5.62% | |||||||||
| BofA/Merrill Lynch Preferred Securities Fixed Rate Index | (1.55)% | 5.07% | 5.79% | |||||||||
| JPI Blended Benchmark (Old Blended Benchmark) | (1.38)% | 5.48% | 5.87% | |||||||||
Since inception returns are from 7/26/12. Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.
Common Share Price Performance — Weekly Closing Price
| 26 | NUVEEN |
This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings, while BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by these national rating agencies.
| 1 | Includes 1.9% (as a percentage of total investments) in emerging market countries. |
| NUVEEN | 27 |
JPS
Nuveen Preferred Securities Income Fund
Performance Overview and Holding Summaries as of January 31, 2017
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
Average Annual Total Returns as of January 31, 2017
| Cumulative | Average Annual | |||||||||||||||
| 6-Month | 1-Year | 5-Year | 10-Year | |||||||||||||
| JPS at Common Share NAV | 4.15% | 11.00% | 10.34% | 4.40% | ||||||||||||
| JPS at Common Share Price | 3.94% | 15.29% | 10.78% | 4.69% | ||||||||||||
| BofA Merrill Lynch U.S. All Capital Securities Index | (0.13)% | 6.38% | 7.09% | 6.89% | ||||||||||||
| JPS Blended Benchmark (New Blended Benchmark) | 2.43% | 8.59% | 6.48% | 4.27% | ||||||||||||
| Bloomberg Barclays U.S. Aggregate Bond Index | (2.95)% | 1.45% | 2.09% | 4.37% | ||||||||||||
| JPS Blended Benchmark (Old Blended Benchmark) | (0.13)% | 5.57% | 7.43% | 4.68% | ||||||||||||
Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.
Common Share Price Performance — Weekly Closing Price
| 28 | NUVEEN |
This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings, while BB, B, CCC, CC, C and D are below investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by these national rating agencies.
| 1 | Includes 0.7% (as a percentage of total investments) in emerging market countries. |
| NUVEEN | 29 |
JPT
Nuveen Preferred and Income 2022 Term Fund
Performance Overview and Holding Summaries as of January 31, 2017
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
Average Annual Total Returns as of January 31, 2017
| Cumulative | ||||||||
| Since Inception |
||||||||
| JPI at Common Share NAV | (0.22)% | |||||||
| JPI at Common Share Price | (0.40)% | |||||||
| BofA/Merrill Lynch U.S. All Capital Securities Index | 0.25% | |||||||
Since inception returns are from 1/26/17. Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.
| 30 | NUVEEN |
This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings, while BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by these national rating agencies.
| NUVEEN | 31 |
JPW
Nuveen Flexible Investment Income Fund
Performance Overview and Holding Summaries as of January 31, 2017
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
Average Annual Total Returns as of January 31, 2017
| Cumulative | Average Annual | |||||||||||
| 6-Month | 1-Year | Since Inception |
||||||||||
| JPW at Common Share NAV | 1.27% | 19.19% | 7.15% | |||||||||
| JPW at Common Share Price | 5.11% | 29.90% | 4.79% | |||||||||
| Bloomberg Barclays U.S. Aggregate Bond Index | (2.95)% | 1.45% | 2.91% | |||||||||
Since inception returns are from 6/25/13. Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.
Common Share Price Performance — Weekly Closing Price
| 32 | NUVEEN |
This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings, while BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by these national rating agencies.
| 1 | Includes 1.6% (as a percentage of total investments) in emerging markets countries. |
| NUVEEN | 33 |
JPC
| Nuveen Preferred Income Opportunities Fund |
||
| January 31, 2017 (Unaudited) |
| Shares | Description (1) | Value | ||||||||||||||||||
| LONG-TERM INVESTMENTS – 139.1% (99.4% of Total Investments) |
| |||||||||||||||||||
| COMMON STOCKS – 3.7% (2.6% of Total Investments) |
| |||||||||||||||||||
| Air Freight & Logistics – 0.2% | ||||||||||||||||||||
| 15,600 | United Parcel Service, Inc., Class B, (2) |
$ | 1,702,428 | |||||||||||||||||
| Biotechnology – 0.2% | ||||||||||||||||||||
| 22,500 | Gilead Sciences, Inc. |
1,630,125 | ||||||||||||||||||
| Capital Markets – 0.5% | ||||||||||||||||||||
| 164,035 | Ares Capital Corporation, (2) |
2,772,192 | ||||||||||||||||||
| 101,032 | TPG Specialty Lending, Inc. |
1,845,855 | ||||||||||||||||||
| Total Capital Markets |
4,618,047 | |||||||||||||||||||
| Consumer Finance – 0.2% | ||||||||||||||||||||
| 48,400 | Synchrony Financial |
1,733,688 | ||||||||||||||||||
| Equity Real Estate Investment Trusts – 0.7% | ||||||||||||||||||||
| 80,500 | Apartment Investment & Management Company, Class A, (2) |
3,547,635 | ||||||||||||||||||
| 119,906 | Colony Northstar, Inc. |
1,669,092 | ||||||||||||||||||
| 66,100 | MGM Growth Properties LLC |
1,706,702 | ||||||||||||||||||
| Total Equity Real Estate Investment Trusts |
6,923,429 | |||||||||||||||||||
| Industrial Conglomerates – 0.5% | ||||||||||||||||||||
| 54,800 | Philips Electronics, (2) |
1,610,024 | ||||||||||||||||||
| 27,000 | Siemens AG, Sponsored ADR, (3) |
3,509,190 | ||||||||||||||||||
| Total Industrial Conglomerates |
5,119,214 | |||||||||||||||||||
| Media – 0.3% | ||||||||||||||||||||
| 55,855 | National CineMedia, Inc., (2), (4) |
818,834 | ||||||||||||||||||
| 47,035 | Viacom Inc., Class B, (2) |
1,982,055 | ||||||||||||||||||
| Total Media |
2,800,889 | |||||||||||||||||||
| Multi-Utilities – 0.1% | ||||||||||||||||||||
| 97,600 | Veolia Environment S.A., ADR, (3) |
1,664,080 | ||||||||||||||||||
| Pharmaceuticals – 0.7% | ||||||||||||||||||||
| 149,300 | AstraZeneca PLC, (2) |
4,065,439 | ||||||||||||||||||
| 84,000 | GlaxoSmithKline PLC |
3,302,040 | ||||||||||||||||||
| Total Pharmaceuticals |
7,367,479 | |||||||||||||||||||
| Software – 0.2% | ||||||||||||||||||||
| 42,000 | Oracle Corporation, (2) |
1,684,620 | ||||||||||||||||||
| Tobacco – 0.1% | ||||||||||||||||||||
| 72,756 | Vector Group Ltd., (2) |
1,604,997 | ||||||||||||||||||
| Total Common Stocks (cost $36,253,775) |
36,848,996 | |||||||||||||||||||
| Shares | Description (1) | Coupon | Ratings (5) | Value | ||||||||||||||||
| $25 PAR (OR SIMILAR) RETAIL PREFERRED – 54.4% (38.9% of Total Investments) |
| |||||||||||||||||||
| Banks – 9.7% | ||||||||||||||||||||
| 67,802 | Boston Private Financial Holdings Inc., (4) |
6.950% | N/R | $ | 1,718,103 | |||||||||||||||
| 148,207 | Citigroup Inc. |
8.125% | BB+ | 4,140,904 | ||||||||||||||||
| 445,498 | Citigroup Inc., (2) |
7.125% | BB+ | 12,460,579 | ||||||||||||||||
| 34 | NUVEEN |
| Shares | Description (1) | Coupon | Ratings (5) | Value | ||||||||||||||||
| Banks (continued) | ||||||||||||||||||||
| 6,179 | Citigroup Inc. |
6.875% | BB+ | $ | 171,838 | |||||||||||||||
| 148,251 | Countrywide Capital Trust III |
7.000% | BBB– | 3,772,988 | ||||||||||||||||
| 143,677 | Cowen Group, Inc. |
8.250% | N/R | 3,685,315 | ||||||||||||||||
| 165,221 | Fifth Third Bancorp. |
6.625% | Baa3 | 4,616,275 | ||||||||||||||||
| 123,900 | FNB Corporation |
7.250% | Ba2 | 3,713,283 | ||||||||||||||||
| 138,932 | HSBC Holdings PLC |
8.000% | Baa1 | 3,620,568 | ||||||||||||||||
| 414,200 | Huntington BancShares Inc. |
6.250% | Baa3 | 10,711,212 | ||||||||||||||||
| 117,760 | KeyCorp |
8.233% | Baa3 | 3,007,590 | ||||||||||||||||
| 109,175 | KeyCorp |
6.125% | Baa3 | 2,991,395 | ||||||||||||||||
| 82,000 | People’s United Financial, Inc. |
5.625% | BB+ | 2,127,900 | ||||||||||||||||
| 22,388 | PNC Financial Services |
6.125% | Baa2 | 634,924 | ||||||||||||||||
| 259,573 | Private Bancorp Incorporated |
7.125% | N/R | 6,678,813 | ||||||||||||||||
| 24,746 | Regions Financial Corporation |
6.375% | Ba1 | 632,013 | ||||||||||||||||
| 449,744 | Regions Financial Corporation, (2) |
6.375% | Ba1 | 12,134,093 | ||||||||||||||||
| 135,134 | TCF Financial Corporation |
7.500% | BB- | 3,493,214 | ||||||||||||||||
| 132,000 | U.S. Bancorp. |
6.500% | A3 | 3,861,000 | ||||||||||||||||
| 216,373 | Webster Financial Corporation |
6.400% | Baa3 | 5,515,348 | ||||||||||||||||
| 73,475 | Western Alliance Bancorp. |
6.250% | N/R | 1,825,854 | ||||||||||||||||
| 187,983 | Zions Bancorporation |
7.900% | BB– | 4,861,240 | ||||||||||||||||
| 39,465 | Zions Bancorporation |
6.300% | BB– | 1,067,528 | ||||||||||||||||
| Total Banks |
97,441,977 | |||||||||||||||||||
| Capital Markets – 7.4% | ||||||||||||||||||||
| 130,200 | Apollo Investment Corporation |
6.875% | BBB– | 3,373,482 | ||||||||||||||||
| 112,775 | Apollo Investment Corporation |
6.625% | BBB– | 2,840,802 | ||||||||||||||||
| 185,789 | Capitala Finance Corporation |
7.125% | N/R | 4,769,204 | ||||||||||||||||
| 133,500 | Charles Schwab Corporation |
6.000% | BBB | 3,497,700 | ||||||||||||||||
| 74,047 | Charles Schwab Corporation |
5.950% | BBB | 1,923,741 | ||||||||||||||||
| 120,805 | Fifth Street Finance Corporation |
6.125% | BBB– | 3,028,581 | ||||||||||||||||
| 14,840 | Gladstone Capital Corporation |
6.750% | N/R | 379,014 | ||||||||||||||||
| 74,600 | Goldman Sachs Group, Inc. |
5.500% | Ba1 | 1,910,506 | ||||||||||||||||
| 41,035 | Hercules Technology Growth Capital Incorporated |
7.000% | BBB– | 1,035,313 | ||||||||||||||||
| 9,651 | Hercules Technology Growth Capital Incorporated |
7.000% | BBB– | 241,951 | ||||||||||||||||
| 163,458 | Hercules Technology Growth Capital Incorporated |
6.250% | BBB– | 4,191,063 | ||||||||||||||||
| 284,951 | Ladenburg Thalmann Financial Services Inc. |
8.000% | N/R | 6,981,300 | ||||||||||||||||
| 685,100 | Morgan Stanley |
7.125% | Ba1 | 19,703,476 | ||||||||||||||||
| 219,900 | Morgan Stanley |
6.875% | Ba1 | 6,056,046 | ||||||||||||||||
| 67,500 | Northern Trust Corporation |
5.850% | BBB+ | 1,741,500 | ||||||||||||||||
| 261,622 | Solar Capital Limited |
6.750% | BBB– | 6,556,247 | ||||||||||||||||
| 51,445 | State Street Corporation |
5.350% | Baa1 | 1,310,304 | ||||||||||||||||
| 74,800 | Stifel Financial Corporation |
6.250% | BB– | 1,937,320 | ||||||||||||||||
| 119,001 | Triangle Capital Corporation |
6.375% | N/R | 3,038,096 | ||||||||||||||||
| Total Capital Markets |
74,515,646 | |||||||||||||||||||
| Consumer Finance – 2.7% | ||||||||||||||||||||
| 277,000 | Discover Financial Services |
6.500% | BB– | 7,146,600 | ||||||||||||||||
| 608,972 | GMAC Capital Trust I |
8.125% | B+ | 15,650,580 | ||||||||||||||||
| 90,709 | SLM Corporation, Series A |
6.970% | Ba3 | 4,580,805 | ||||||||||||||||
| Total Consumer Finance |
27,377,985 | |||||||||||||||||||
| Diversified Financial Services – 1.3% | ||||||||||||||||||||
| 30,391 | KKR Financial Holdings LLC |
7.500% | A– | 777,098 | ||||||||||||||||
| 326,399 | KKR Financial Holdings LLC |
7.375% | BBB | 8,489,638 | ||||||||||||||||
| 141,562 | Main Street Capital Corporation |
6.125% | N/R | 3,703,262 | ||||||||||||||||
| Total Diversified Financial Services |
12,969,998 | |||||||||||||||||||
| Diversified Telecommunication Services – 1.1% | ||||||||||||||||||||
| 177,265 | Qwest Corporation |
7.000% | BBB– | 4,461,760 | ||||||||||||||||
| 162,715 | Qwest Corporation |
6.875% | BBB– | 4,176,894 | ||||||||||||||||
| 44,800 | Qwest Corporation |
6.625% | BBB- | 1,123,136 | ||||||||||||||||
| 53,900 | Verizon Communications Inc. |
5.900% | A– | 1,424,038 | ||||||||||||||||
| Total Diversified Telecommunication Services |
11,185,828 | |||||||||||||||||||
| NUVEEN | 35 |
| JPC | Nuveen Preferred Income Opportunities Fund | |||
| Portfolio of Investments (continued) | January 31, 2017 (Unaudited) | |||
| Shares | Description (1) | Coupon | Ratings (5) | Value | ||||||||||||||||
| Equity Real Estate Investment Trusts – 5.6% | ||||||||||||||||||||
| 57,162 | Apartment Investment & Management Company |
6.875% | BB | $ | 1,486,212 | |||||||||||||||
| 186,579 | Cedar Shopping Centers Inc., Series A |
7.250% | N/R | 4,636,488 | ||||||||||||||||
| 59,761 | Chesapeake Lodging Trust |
7.750% | N/R | 1,527,491 | ||||||||||||||||
| 182,859 | Colony Northstar, Inc. |
8.875% | N/R | 4,684,848 | ||||||||||||||||
| 51,926 | Colony Northstar, Inc. |
8.750% | N/R | 1,355,788 | ||||||||||||||||
| 121,633 | Colony Northstar, Inc., (2) |
8.250% | N/R | 3,082,180 | ||||||||||||||||
| 79,403 | Colony Northstar, Inc. |
7.500% | N/R | 1,955,696 | ||||||||||||||||
| 80,341 | Colony Northstar, Inc. |
7.125% | N/R | 1,960,320 | ||||||||||||||||
| 242,314 | DDR Corporation |
6.500% | Baa3 | 6,094,197 | ||||||||||||||||
| 123,561 | Digital Realty Trust Inc. |
7.375% | Baa3 | 3,386,807 | ||||||||||||||||
| 256,406 | Dupont Fabros Technology |
6.625% | Ba2 | 6,776,811 | ||||||||||||||||
| 17,628 | Hospitality Properties Trust |
7.125% | BB | 442,639 | ||||||||||||||||
| 132,624 | Penn Real Estate Investment Trust |
8.250% | N/R | 3,375,281 | ||||||||||||||||
| 17,144 | Penn Real Estate Investment Trust |
7.375% | N/R | 437,001 | ||||||||||||||||
| 58,526 | Regency Centers Corporation |
6.625% | Baa2 | 1,473,685 | ||||||||||||||||
| 106,502 | Senior Housing Properties Trust, (4) |
5.625% | BBB– | 2,517,707 | ||||||||||||||||
| 95,309 | Sunstone Hotel Investors Inc., (4) |
6.950% | N/R | 2,458,972 | ||||||||||||||||
| 47,078 | Urstadt Biddle Properties |
7.125% | N/R | 1,201,431 | ||||||||||||||||
| 262,795 | VEREIT, Inc. |
6.700% | BB | 6,646,086 | ||||||||||||||||
| Total Equity Real Estate Investment Trusts |
55,499,640 | |||||||||||||||||||
| Food Products – 3.3% | ||||||||||||||||||||
| 195,200 | CHS Inc. |
7.875% | N/R | 5,590,528 | ||||||||||||||||
| 410,101 | CHS Inc., (2) |
7.100% | N/R | 11,273,676 | ||||||||||||||||
| 441,504 | CHS Inc., (2), (4) |
6.750% | N/R | 11,902,948 | ||||||||||||||||
| 23,000 | Dairy Farmers of America Inc., 144A, (3) |
7.875% | Baa3 | 2,412,845 | ||||||||||||||||
| 19,500 | Dairy Farmers of America Inc., 144A, (3) |
7.875% | Baa3 | 2,091,375 | ||||||||||||||||
| Total Food Products |
33,271,372 | |||||||||||||||||||
| Insurance – 12.0% | ||||||||||||||||||||
| 255,984 | Arch Capital Group Limited |
6.750% | BBB | 6,504,553 | ||||||||||||||||
| 302,283 | Argo Group US Inc., (2) |
6.500% | BBB– | 7,723,331 | ||||||||||||||||
| 82,432 | Aspen Insurance Holdings Limited |
7.250% | BBB– | 2,126,746 | ||||||||||||||||
| 408,600 | Aspen Insurance Holdings Limited, (2) |
5.950% | BBB– | 10,725,750 | ||||||||||||||||
| 58,900 | Aspen Insurance Holdings Limited |
5.625% | BBB– | 1,354,700 | ||||||||||||||||
| 234,767 | Axis Capital Holdings Limited |
6.875% | BBB | 5,948,996 | ||||||||||||||||
| 103,700 | Axis Capital Holdings Limited |
5.500% | BBB | 2,337,398 | ||||||||||||||||
| 56,900 | Delphi Financial Group, Inc., (3) |
7.376% | BB+ | 1,273,138 | ||||||||||||||||
| 235,211 | Endurance Specialty Holdings Limited, (2) |
6.350% | BBB– | 6,171,937 | ||||||||||||||||
| 195,276 | Hartford Financial Services Group Inc. |
7.875% | BBB– | 5,952,012 | ||||||||||||||||
| 561,100 | Kemper Corporation |
7.375% | Ba1 | 14,925,260 | ||||||||||||||||
| 302,126 | Maiden Holdings Limited, (2) |
8.250% | BB | 7,846,212 | ||||||||||||||||
| 67,000 | Maiden Holdings Limited |
6.625% | BBB– | 1,697,780 | ||||||||||||||||
| 233,932 | Maiden Holdings NA Limited, (2) |
8.000% | BBB– | 5,955,909 | ||||||||||||||||
| 265,933 | Maiden Holdings NA Limited |
7.750% | BBB– | 7,182,850 | ||||||||||||||||
| 106,195 | National General Holding Company |
7.625% | N/R | 2,713,282 | ||||||||||||||||
| 76,400 | National General Holding Company |
7.500% | N/R | 1,938,268 | ||||||||||||||||
| 153,954 | National General Holding Company |
7.500% | N/R | 3,918,129 | ||||||||||||||||
| 25,000 | PartnerRe Limited |
7.250% | Baa2 | 696,250 | ||||||||||||||||
| 279,732 | Reinsurance Group of America Inc. |
6.200% | BBB | 7,885,645 | ||||||||||||||||
| 361,700 | Reinsurance Group of America, Inc., (2) |
5.750% | BBB | 9,693,560 | ||||||||||||||||
| 204,400 | Torchmark Corporation |
6.125% | BBB+ | 5,257,168 | ||||||||||||||||
| Total Insurance |
119,828,874 | |||||||||||||||||||
| Mortgage Real Estate Investment Trusts – 0.8% | ||||||||||||||||||||
| 109,063 | Arbor Realty Trust Incorporated |
7.375% | N/R | 2,770,200 | ||||||||||||||||
| 96,986 | MFA Financial Inc. |
8.000% | N/R | 2,458,595 | ||||||||||||||||
| 107,000 | Wells Fargo REIT |
6.375% | BBB+ | 2,791,630 | ||||||||||||||||
| Total Mortgage Real Estate Investment Trusts |
8,020,425 | |||||||||||||||||||
| 36 | NUVEEN |
| Shares | Description (1) | Coupon | Ratings (5) | Value | ||||||||||||||||
| Oil, Gas & Consumable Fuels – 0.8% | ||||||||||||||||||||
| 80,400 | Nustar Energy LP |
8.500% | Ba3 | $ | 2,146,680 | |||||||||||||||
| 206,105 | Nustar Logistics Limited Partnership |
7.625% | Ba2 | 5,358,730 | ||||||||||||||||
| 5,359 | Scorpio Tankers Inc. |
6.750% | N/R | 124,382 | ||||||||||||||||
| Total Oil, Gas & Consumable Fuels |
7,629,792 | |||||||||||||||||||
| Real Estate Management & Development – 0.5% | ||||||||||||||||||||
| 174,646 | Kennedy-Wilson Inc. |
7.750% | BB– | 4,558,261 | ||||||||||||||||
| Specialty Retail – 0.8% | ||||||||||||||||||||
| 256,074 | TravelCenters of America LLC |
8.000% | N/R | 6,540,130 | ||||||||||||||||
| 62,133 | TravelCenters of America LLC |
8.000% | N/R | 1,612,351 | ||||||||||||||||
| Total Specialty Retail |
8,152,481 | |||||||||||||||||||
| Wireless Telecommunication Services – 1.0% | ||||||||||||||||||||
| 391,199 | United States Cellular Corporation, (2) |
7.250% | Ba1 | 10,268,974 | ||||||||||||||||
| U.S. Agency – 7.4% | ||||||||||||||||||||
| 128,500 | AgriBank FCB, (3) |
6.875% | BBB+ | 13,685,250 | ||||||||||||||||
| 172,975 | Cobank Agricultural Credit Bank, (3) |
6.250% | BBB+ | 17,600,206 | ||||||||||||||||
| 57,511 | Cobank Agricultural Credit Bank, (3) |
6.200% | BBB+ | 5,846,355 | ||||||||||||||||
| 240 | Farm Credit Bank of Texas, 144A, (3) |
6.750% | Baa1 | 25,231,497 | ||||||||||||||||
| 38,725 | Cobank Agricultural Credit Bank, (3) |
6.125% | BBB+ | 3,775,688 | ||||||||||||||||
| 160,700 | Federal Agricultural Mortgage Corporation |
6.875% | N/R | 4,403,180 | ||||||||||||||||
| 143,400 | Federal Agricultural Mortgage Corporation |
6.000% | N/R | 3,797,232 | ||||||||||||||||
| Total U.S. Agency |
74,339,408 | |||||||||||||||||||
| Total $25 Par (or similar) Preferred Securities (cost $520,219,442) |
545,060,661 | |||||||||||||||||||
| Shares | Description (1) | Coupon | Maturity | Ratings (5) | Value | |||||||||||||||
| CONVERTIBLE PREFERRED SECURITIES – 2.9% (2.1% of Total Investments) |
| |||||||||||||||||||
| Banks – 1.3% | ||||||||||||||||||||
| 2,800 | Bank of America Corporation |
7.250% | N/A (6) | BB+ | $ | 3,338,300 | ||||||||||||||
| 8,375 | Wells Fargo & Company, (2) |
7.500% | N/A (6) | BBB | 10,058,794 | |||||||||||||||
| Total Banks |
13,397,094 | |||||||||||||||||||
| Diversified Telecommunication Services – 0.3% | ||||||||||||||||||||
| 42,100 | Frontier Communications Corporation |
11.125% | 6/29/18 | N/R | 3,077,931 | |||||||||||||||
| Electric Utilities – 1.1% | ||||||||||||||||||||
| 148,050 | Great Plains Energy Inc. |
7.000% | 9/15/19 | N/R | 7,584,602 | |||||||||||||||
| 69,500 | NextEra Energy Inc. |
6.123% | 9/01/19 | BBB | 3,479,865 | |||||||||||||||
| Total Electric Utilities |
11,064,467 | |||||||||||||||||||
| Pharmaceuticals – 0.2% | ||||||||||||||||||||
| 2,375 | Teva Pharmaceutical Industries Limited, (3) |
7.000% | 12/15/18 | N/R | 1,444,000 | |||||||||||||||
| Total Convertible Preferred Securities (cost $29,683,520) |
28,983,492 | |||||||||||||||||||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (5) | Value | |||||||||||||||
| CORPORATE BONDS – 14.0% (10.0% of Total Investments) |
||||||||||||||||||||
| Banks – 4.4% | ||||||||||||||||||||
| $ | 2,500 | Bank of America Corporation |
6.250% | N/A (6) | BB+ | $ | 2,610,000 | |||||||||||||
| 7,660 | Bank of America Corporation |
6.300% | N/A (6) | BB+ | 8,196,200 | |||||||||||||||
| 8,570 | Citigroup Inc. |
5.950% | N/A (6) | BB+ | 8,717,833 | |||||||||||||||
| 7,985 | Citigroup Inc. |
5.875% | N/A (6) | BB+ | 8,234,531 | |||||||||||||||
| 5,055 | ING Groep N.V, (7) |
6.500% | N/A (6) | BBB– | 4,897,031 | |||||||||||||||
| NUVEEN | 37 |
| JPC | Nuveen Preferred Income Opportunities Fund | |||
| Portfolio of Investments (continued) | January 31, 2017 (Unaudited) | |||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (5) | Value | |||||||||||||||
| Banks (continued) | ||||||||||||||||||||
| $ | 9,430 | JP Morgan Chase & Company |
5.300% | N/A (6) | BBB– | $ | 9,689,325 | |||||||||||||
| 2,100 | Standard Chartered PLC, 144A, (7) |
6.500% | N/A (6) | Ba1 | 1,973,370 | |||||||||||||||
| 43,300 | Total Banks |
44,318,290 | ||||||||||||||||||
| Biotechnology – 0.3% | ||||||||||||||||||||
| 3,500 | AMAG Pharmaceuticals Inc., 144A |
7.875% | 9/01/23 | B+ | 3,386,250 | |||||||||||||||
| Capital Markets – 1.1% | ||||||||||||||||||||
| 11,100 | Goldman Sachs Group Inc. |
5.375% | N/A (6) | Ba1 | 11,322,000 | |||||||||||||||
| Chemicals – 0.5% | ||||||||||||||||||||
| 2,125 | A Schulman Inc., 144A |
6.875% | 6/01/23 | B+ | 2,241,875 | |||||||||||||||
| 2,575 | CVR Partners LP / CVR Nitrogen Finance Corp., 144A |
9.250% | 6/15/23 | B+ | 2,742,375 | |||||||||||||||
| 4,700 | Total Chemicals |
4,984,250 | ||||||||||||||||||
| Commercial Services & Supplies – 0.6% | ||||||||||||||||||||
| 1,520 | GFL Environmental Corporation, 144A |
7.875% | 4/01/20 | B– | 1,582,700 | |||||||||||||||
| 2,275 | GFL Environmental Corporation, 144A |
9.875% | 2/01/21 | B– | 2,474,063 | |||||||||||||||
| 2,124 | R.R. Donnelley & Sons Company |
6.500% | 11/15/23 | B+ | 2,076,550 | |||||||||||||||
| 5,919 | Total Commercial Services & Supplies |
6,133,313 | ||||||||||||||||||
| Diversified Financial Services – 0.3% | ||||||||||||||||||||
| 3,170 | BNP Paribas, 144A, (7) |
7.625% | N/A (6) | BBB– | 3,328,500 | |||||||||||||||
| Diversified Telecommunication Services – 1.0% | ||||||||||||||||||||
| 9,700 | Frontier Communications Corporation, (2) |
11.000% | 9/15/25 | BB | 9,809,125 | |||||||||||||||
| Equity Real Estate Investment Trusts – 0.6% | ||||||||||||||||||||
| 5,525 | Communications Sales & Leasing Inc. |
8.250% | 10/15/23 | BB– | 5,994,625 | |||||||||||||||
| Food Products – 0.2% | ||||||||||||||||||||
| 1,310 | Land O Lakes Capital Trust I, 144A, (2) |
7.450% | 3/15/28 | Ba1 | 1,470,475 | |||||||||||||||
| Health Care Providers & Services – 0.3% | ||||||||||||||||||||
| 3,295 | Kindred Healthcare Inc. |
8.000% | 1/15/20 | B– | 3,245,575 | |||||||||||||||
| Insurance – 0.2% | ||||||||||||||||||||
| 2,010 | Security Benefit Life Insurance Company, 144A, (2) |
7.450% | 10/01/33 | BBB | 2,428,530 | |||||||||||||||
| Internet Software & Services – 0.1% | ||||||||||||||||||||
| 1,285 | Donnelley Financial Solutions, Inc., 144A |
8.250% | 10/15/24 | B | 1,329,975 | |||||||||||||||
| Machinery – 0.6% | ||||||||||||||||||||
| 3,200 | Dana Financing Luxembourg Sarl, 144A |
6.500% | 6/01/26 | BB+ | 3,384,576 | |||||||||||||||
| 2,703 | Meritor Inc. |
6.750% | 6/15/21 | B+ | 2,797,605 | |||||||||||||||
| 5,903 | Total Machinery |
6,182,181 | ||||||||||||||||||
| Media – 0.7% | ||||||||||||||||||||
| 5,850 | Dish DBS Corporation |
7.750% | 7/01/26 | Ba3 | 6,535,562 | |||||||||||||||
| Oil, Gas & Consumable Fuels – 0.3% | ||||||||||||||||||||
| 2,350 | Enviva Parnters LP / Enviva Partners Finance Corp., 144A |
8.500% | 11/01/21 | B+ | 2,520,375 | |||||||||||||||
| Real Estate Management & Development – 0.4% | ||||||||||||||||||||
| 3,200 | Greystar Real Estate Partners, LLC, 144A |
8.250% | 12/01/22 | BB– | 3,468,000 | |||||||||||||||
| Specialty Retail – 0.6% | ||||||||||||||||||||
| 6,450 | L Brands, Inc. |
6.875% | 11/01/35 | BB+ | 6,288,750 | |||||||||||||||
| 38 | NUVEEN |
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (5) | Value | |||||||||||||||
| Technology Hardware, Storage & Peripherals – 0.8% | ||||||||||||||||||||
| $ | 6,575 | Western Digital Corporation, 144A |
10.500% | 4/01/24 | BB+ | $ | 7,750,281 | |||||||||||||
| Wireless Telecommunication Services – 1.0% | ||||||||||||||||||||
| 3,175 | Altice Financing SA, 144A |
7.500% | 5/15/26 | BB– | 3,351,609 | |||||||||||||||
| 5,875 | Viacom Inc. |
6.875% | 4/30/36 | BBB | 6,258,685 | |||||||||||||||
| 9,050 | Total Wireless Telecommunication Services |
9,610,294 | ||||||||||||||||||
| $ | 134,192 | Total Corporate Bonds (cost $135,908,645) |
140,106,351 | |||||||||||||||||
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (5) | Value | |||||||||||||||
| $1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 64.1% (45.8% of Total Investments) |
| |||||||||||||||||||
| Banks – 27.1% | ||||||||||||||||||||
| $ | 2,320 | Australia and New Zealand Banking Group Limited of the United Kingdom, 144A, (7) |
6.750% | N/A (6) | Baa1 | $ | 2,461,601 | |||||||||||||
| 2,600 | Banco Bilbao Vizcaya Argentaria S.A, Reg S, (7) |
9.000% | N/A (6) | BB | 2,712,580 | |||||||||||||||
| 600 | Banco Santander SA, Reg S, (7) |
6.375% | N/A (6) | Ba1 | 562,380 | |||||||||||||||
| 1,476 | Bank of America Corporation |
8.000% | N/A (6) | BB+ | 1,523,970 | |||||||||||||||
| 21,265 | Bank of America Corporation, (4) |
6.500% | N/A (6) | BB+ | 22,806,710 | |||||||||||||||
| 3,575 | Barclays Bank PLC, 144A |
10.180% | 6/12/21 | A– | 4,476,640 | |||||||||||||||
| 15,935 | Barclays PLC, (7) |
8.250% | N/A (6) | BB+ | 16,629,862 | |||||||||||||||
| 2,925 | Citigroup Inc., (4) |
5.800% | N/A (6) | BB+ | 3,005,438 | |||||||||||||||
| 3,900 | Citigroup Inc. |
6.250% | N/A (6) | BB+ | 4,119,375 | |||||||||||||||
| 10,795 | Citigroup Inc. |
6.125% | N/A (6) | BB+ | 11,340,148 | |||||||||||||||
| 7,214 | Citizens Financial Group Inc. |
5.500% | N/A (6) | BB+ | 7,237,446 | |||||||||||||||
| 7,790 | Cobank Agricultural Credit Bank |
6.250% | N/A (6) | BBB+ | 8,211,486 | |||||||||||||||
| 3,960 | Commerzbank AG, 144A |
8.125% | 9/19/23 | BBB | 4,544,100 | |||||||||||||||
| 5,915 | Credit Agricole SA, 144A, (7) |
8.125% | N/A (6) | BB+ | 6,288,237 | |||||||||||||||
| 3,950 | Credit Agricole, S.A, 144A, (7) |
6.625% | N/A (6) | BB+ | 3,885,813 | |||||||||||||||
| 1,000 | HSBC Bank PLC |
1.188% | N/A (6) | A3 | 762,500 | |||||||||||||||
| 500 | HSBC Bank PLC |
1.038% | N/A (6) | A3 | 381,250 | |||||||||||||||
| 42,040 | HSBC Capital Funding LP, Debt, 144A |
10.176% | N/A (6) | Baa1 | 6,242,940 | |||||||||||||||
| 3,615 | HSBC Holdings PLC, (7) |
6.875% | N/A (6) | BBB | 3,839,246 | |||||||||||||||
| 101,750 | Intesa Sanpaolo SpA, 144A, (2), (7) |
7.700% | N/A (6) | Ba3 | 9,322,844 | |||||||||||||||
| 216,300 | JP Morgan Chase & Company |
6.750% | N/A (6) | BBB– | 23,672,085 | |||||||||||||||
| 125 | JP Morgan Chase & Company |
6.100% | N/A (6) | BBB– | 128,911 | |||||||||||||||
| 5,700 | JP Morgan Chase & Company |
7.900% | N/A (6) | BBB– | 5,878,125 | |||||||||||||||
| 3,485 | KeyCorp |
5.000% | N/A (6) | Baa3 | 3,315,106 | |||||||||||||||
| 20,990 | Lloyds Banking Group PLC, (7) |
7.500% | N/A (6) | BB+ | 21,772,717 | |||||||||||||||
| 37,600 | M&T Bank Corporation |
6.450% | N/A (6) | Baa2 | 4,060,800 | |||||||||||||||
| 36,650 | M&T Bank Corporation |
5.125% | N/A (6) | Baa2 | 3,583,271 | |||||||||||||||
| 40,000 | Nordea Bank AB, 144A, (7) |
6.125% | N/A (6) | BBB | 3,885,000 | |||||||||||||||
| 10,745 | PNC Financial Services Inc. |
6.750% | N/A (6) | Baa2 | 11,806,069 | |||||||||||||||
| 46,550 | PNC Financial Services |
5.000% | N/A (6) | Baa2 | 4,585,175 | |||||||||||||||
| 3,325 | Royal Bank of Scotland Group PLC, (7) |
7.500% | N/A (6) | BB– | 3,225,250 | |||||||||||||||
| 3,005 | Royal Bank of Scotland Group PLC, (7) |
8.625% | N/A (6) | BB– | 3,102,663 | |||||||||||||||
| 4,883 | Royal Bank of Scotland Group PLC |
7.648% | N/A (6) | BB | 5,643,527 | |||||||||||||||
| 6,246 | Societe Generale, 144A, (7) |
7.875% | N/A (6) | BB+ | 6,105,465 | |||||||||||||||
| 6,795 | Societe Generale, 144A, (7) |
7.375% | N/A (6) | BB+ | 6,807,571 | |||||||||||||||
| 735 | Standard Chartered PLC, 144A, (7) |
7.500% | N/A (6) | Ba1 | 736,838 | |||||||||||||||
| 4,995 | SunTrust Bank Inc. |
5.625% | N/A (6) | Baa3 | 5,157,338 | |||||||||||||||
| 250 | U.S. Bancorp. |
5.125% | N/A (6) | A3 | 259,063 | |||||||||||||||
| 3,750 | Wachovia Capital Trust III |
5.570% | N/A (6) | BBB | 3,707,813 | |||||||||||||||
| 8,641 | Wells Fargo & Company, (4) |
7.980% | N/A (6) | BBB | 9,073,050 | |||||||||||||||
| 19,925 | Wells Fargo & Company |
5.875% | N/A (6) | BBB | 21,182,766 | |||||||||||||||
| 3,450 | Zions Bancorporation |
7.200% | N/A (6) | BB– | 3,708,750 | |||||||||||||||
| Total Banks |
271,751,919 | |||||||||||||||||||
| NUVEEN | 39 |
| JPC | Nuveen Preferred Income Opportunities Fund | |||
| Portfolio of Investments (continued) | January 31, 2017 (Unaudited) | |||
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (5) | Value | |||||||||||||||
| Capital Markets – 3.6% | ||||||||||||||||||||
| $ | 3,270 | Bank of New York Mellon Corporation, (2) |
4.950% | N/A (6) | Baa1 | $ | 3,347,663 | |||||||||||||
| 8,920 | Credit Suisse Group AG, 144A, (7) |
7.500% | N/A (6) | BB | 9,436,111 | |||||||||||||||
| 5,640 | Goldman Sachs Group Inc. |
5.300% | N/A (6) | Ba1 | 5,515,920 | |||||||||||||||
| 5,880 | Morgan Stanley |
5.550% | N/A (6) | Ba1 | 6,034,350 | |||||||||||||||
| 1,225 | State Street Corporation |
5.250% | N/A (6) | Baa1 | 1,277,063 | |||||||||||||||
| 5,175 | UBS Group AG, Reg S, (7) |
7.000% | N/A (6) | BB+ | 5,453,156 | |||||||||||||||
| 5,255 | UBS Group AG, Reg S, (7) |
7.125% | N/A (6) | BB+ | 5,419,839 | |||||||||||||||
| Total Capital Markets |
36,484,102 | |||||||||||||||||||
| Commercial Services & Supplies – 0.3% | ||||||||||||||||||||
| 3,245 | AerCap Global Aviation Trust, 144A |
6.500% | 6/15/45 | BB | 3,342,350 | |||||||||||||||
| Consumer Finance – 2.1% | ||||||||||||||||||||
| 5,271 | American Express Company |
5.200% | N/A (6) | Baa2 | 5,323,710 | |||||||||||||||
| 1,900 | American Express Company |
4.900% | N/A (6) | Baa2 | 1,864,185 | |||||||||||||||
| 13,730 | Capital One Financial Corporation |
5.550% | N/A (6) | Baa3 | 14,002,952 | |||||||||||||||
| Total Consumer Finance |
21,190,847 | |||||||||||||||||||
| Diversified Financial Services – 3.9% | ||||||||||||||||||||
| 14,800 | Agstar Financial Services Inc., 144A |
6.750% | N/A (6) | BB | 15,701,875 | |||||||||||||||
| 4,065 | BNP Paribas, 144A, (7) |
7.375% | N/A (6) | BBB– | 4,115,813 | |||||||||||||||
| 5,670 | BNP Paribas, 144A |
7.195% | N/A (6) | BBB | 6,144,863 | |||||||||||||||
| 2,300 | Depository Trust & Clearing Corporation, 144A |
4.875% | N/A (6) | A | 2,351,750 | |||||||||||||||
| 7,443 | Rabobank Nederland, 144A |
11.000% | N/A (6) | Baa2 | 8,717,614 | |||||||||||||||
| 1,955 | Voya Financial Inc., (2) |
5.650% | 5/15/53 | Baa3 | 1,964,775 | |||||||||||||||
| Total Diversified Financial Services |
38,996,690 | |||||||||||||||||||
| Electric Utilities – 2.4% | ||||||||||||||||||||
| 2,250 | Electricite de France, 144A |
5.250% | N/A (6) | BBB | 2,140,313 | |||||||||||||||
| 19,850 | Emera, Inc., (2) |
6.750% | 6/15/76 | BBB– | 21,636,500 | |||||||||||||||
| Total Electric Utilities |
23,776,813 | |||||||||||||||||||
| Energy Equipment & Services – 0.4% | ||||||||||||||||||||
| 3,765 | Transcanada Trust |
5.875% | 8/15/76 | BBB | 3,981,488 | |||||||||||||||
| Equity Real Estate Investment Trusts – 1.4% | ||||||||||||||||||||
| 12 | Sovereign Real Estate Investment Trust, 144A |
12.000% | N/A (6) | Ba1 | 14,514,200 | |||||||||||||||
| Food Products – 3.4% | ||||||||||||||||||||
| 2,245 | Dairy Farmers of America Inc., 144A |
7.125% | N/A (6) | Baa3 | 2,390,925 | |||||||||||||||
| 23,545 | Land O’ Lakes Incorporated, 144A |
8.000% | N/A (6) | BB | 24,486,797 | |||||||||||||||
| 6,750 | Land O’Lakes Inc., 144A |
8.000% | N/A (6) | BB | 7,020,000 | |||||||||||||||
| Total Food Products |
33,897,722 | |||||||||||||||||||
| Industrial Conglomerates – 4.1% | ||||||||||||||||||||
| 39,281 | General Electric Capital Corporation, (4) |
5.000% | N/A (6) | A | 40,724,572 | |||||||||||||||
| Insurance – 14.4% | ||||||||||||||||||||
| 2,650 | Aquarius & Investments PLC fbo SwissRe, Reg S |
8.250% | N/A (6) | N/R | 2,826,824 | |||||||||||||||
| 5,365 | Aviva PLC, Reg S |
8.250% | N/A (6) | BBB+ | 5,576,209 | |||||||||||||||
| 1,205 | AXA SA |
8.600% | 12/15/30 | A3 | 1,668,925 | |||||||||||||||
| 2,460 | Cloverie PLC Zurich Insurance, Reg S |
8.250% | N/A (6) | A | 2,583,000 | |||||||||||||||
| 2,300 | CNP Assurances, Reg S |
7.500% | N/A (6) | BBB+ | 2,446,050 | |||||||||||||||
| 27,085 | Financial Security Assurance Holdings, 144A, (2) |
6.400% | 12/15/66 | BBB+ | 22,412,838 | |||||||||||||||
| 1,755 | Friends Life Group PLC, Reg S |
7.875% | N/A (6) | A– | 1,888,220 | |||||||||||||||
| 2,108 | La Mondiale SAM, Reg S |
7.625% | N/A (6) | BBB | 2,258,195 | |||||||||||||||
| 6,590 | Liberty Mutual Group, 144A,(2) |
7.800% | 3/07/87 | Baa3 | 7,529,075 | |||||||||||||||
| 9,335 | MetLife Capital Trust IV, 144A, (2) |
7.875% | 12/15/67 | BBB | 11,622,075 | |||||||||||||||
| 4,160 | MetLife Capital Trust X, (2) |
9.250% | 4/08/68 | BBB | 5,761,600 | |||||||||||||||
| 40 | NUVEEN |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (5) | Value | |||||||||||||||
| Insurance (continued) | ||||||||||||||||||||
| $ | 3,425 | MetLife Inc. |
5.250% | N/A (6) | BBB | $ | 3,502,063 | |||||||||||||
| 1,150 | Nationwide Financial Services Capital Trust |
7.899% | 3/01/37 | Baa2 | 1,251,361 | |||||||||||||||
| 9,550 | Nationwide Financial Services Inc., (2) |
6.750% | 5/15/67 | Baa2 | 9,979,750 | |||||||||||||||
| 6,855 | Provident Financing Trust I, (2) |
7.405% | 3/15/38 | Baa3 | 7,489,088 | |||||||||||||||
| 3,315 | Prudential Financial Inc., (2) |
5.875% | 9/15/42 | BBB+ | 3,538,763 | |||||||||||||||
| 11,675 | QBE Insurance Group Limited, 144A |
7.500% | 11/24/43 | Baa2 | 12,959,250 | |||||||||||||||
| 2,340 | QBE Insurance Group Limited, Reg S |
6.750% | 12/02/44 | BBB | 2,492,100 | |||||||||||||||
| 15,955 | Sirius International Group Limited, 144A |
7.506% | N/A (6) | BB+ | 16,234,213 | |||||||||||||||
| 19,553 | Symetra Financial Corporation, 144A, (2) |
8.300% | 10/15/37 | Baa2 | 19,944,060 | |||||||||||||||
| Total Insurance |
143,963,659 | |||||||||||||||||||
| Machinery – 0.2% | ||||||||||||||||||||
| 2,215 | Stanley Black & Decker Inc., (2) |
5.750% | 12/15/53 | BBB+ | 2,325,086 | |||||||||||||||
| Metals & Mining – 0.6% | ||||||||||||||||||||
| 5,625 | BHP Billiton Finance USA Limited, 144A |
6.250% | 10/19/75 | A– | 6,173,438 | |||||||||||||||
| U.S. Agency – 0.2% | ||||||||||||||||||||
| 2 | Farm Credit Bank of Texas, 144A |
10.000% | N/A (6) | Baa1 | 2,040,000 | |||||||||||||||
| Total $1,000 Par (or similar) Institutional Preferred (cost $615,408,355) |
|
643,162,886 | ||||||||||||||||||
| Total Long-Term Investments (cost $1,337,473,737) |
1,394,162,386 | |||||||||||||||||||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Value | ||||||||||||||||
| SHORT-TERM INVESTMENTS – 0.9% (0.6% of Total Investments) |
||||||||||||||||||||
| REPURCHASE AGREEMENTS – 0.9% (0.6% of Total Investments) | ||||||||||||||||||||
| $ | 8,717 | Repurchase Agreement with Fixed Income Clearing Corporation, dated
1/31/17, repurchase price $8,717,361, |
0.030% | 2/01/17 | $ | 8,717,354 | ||||||||||||||
| Total Short-Term Investments (cost $8,717,354) |
8,717,354 | |||||||||||||||||||
| Total Investments (cost $1,346,191,091) – 140.0% |
1,402,879,740 | |||||||||||||||||||
| Borrowings – (40.3)% (8), (9) |
(404,100,000 | ) | ||||||||||||||||||
| Other Assets Less Liabilities – 0.3% (10) |
3,611,596 | |||||||||||||||||||
| Net Assets Applicable to Common Shares – 100% |
$ | 1,002,391,336 | ||||||||||||||||||
Investments in Derivatives as of January 31, 2017
Interest Rate Swaps
| Counterparty | Notional Amount |
Fund Pay/Receive Floating Rate |
Floating Rate Index | Fixed Rate (Annualized) |
Fixed Rate Payment Frequency |
Effective Date (11) |
Optional |
Termination Date |
Value | Unrealized Appreciation (Depreciation) |
||||||||||||||||||||||||||||||
| JP Morgan Chase Bank, N.A. |
$ | 114,296,000 | Receive | 1-Month USD-LIBOR-ICE | 1.462 | % | Monthly | 7/03/17 | 12/01/18 | 12/01/20 | $ | (524,892 | ) | $ | (2,039,629 | ) | ||||||||||||||||||||||||
| JP Morgan Chase Bank, N.A. |
114,296,000 | Receive | 1-Month USD-LIBOR-ICE | 1.842 | Monthly | 7/03/17 | 12/01/20 | 12/01/22 | (1,200,358 | ) | (3,403,836 | ) | ||||||||||||||||||||||||||||
| $ | 228,592,000 | $ | (1,725,250 | ) | $ | (5,443,465 | ) | |||||||||||||||||||||||||||||||||
| NUVEEN | 41 |
| JPC | Nuveen Preferred Income Opportunities Fund | |||
| Portfolio of Investments (continued) | January 31, 2017 (Unaudited) | |||
For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.
| (1) | All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted. |
| (2) | Investment, or a portion of investment, is hypothecated as described in the Notes to Financial Statements, Note 8 – Borrowing Arrangements, Rehypothecation. The total value of investments hypothecated as of the end of the reporting period was $243,720,246. |
| (3) | For fair value measurement disclosure purposes, investment classified as Level 2. See Notes to Financial Statements, Note 2 – Investment Valuation and Fair Value Measurements for more information. |
| (4) | Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in derivatives. |
| (5) | For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies. |
| (6) | Perpetual security. Maturity date is not applicable. |
| (7) | Contingent Capital Securities (“CoCos”) are debt or preferred securities with loss absorption characteristics built into the terms of the security for the benefit of the issuer, for example an automatic write-down of principal or a mandatory conversion into the issuer’s common stock under certain adverse circumstances, such as the issuer’s capital ratio falling below a specified level. As of the end of the reporting period, the Fund’s total investment in CoCos was $125,961,887, representing 12.6% and 9.0% of Net Assets Applicable to Common Shares and Total Investments, respectively. |
| (8) | The Fund may pledge up to 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives, when applicable) in the Portfolio of Investments as collateral for borrowings. As of the end of the reporting period, investments with a value of $980,703,763 have been pledged as collateral for borrowings. |
| (9) | Borrowings as a percentage of total investments is 28.8%. |
| (10) | Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter (“OTC”) derivatives as presented on the Statement of Assets and Liabilities, when applicable. The unrealized appreciation (depreciation) of OTC-cleared and exchange-traded derivatives is recognized as part of the cash collateral at brokers and/or the receivable or payable for variation margin as presented on the Statement of Assets and Liabilities, when applicable. |
| (11) | Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each contract. |
| 144A | Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers. |
| ADR | American Depositary Receipt |
| Reg S | Regulation S allows U.S. companies to sell securities to persons or entities located outside of the United States without registering those securities with the Securities and Exchange Commission. Specifically, Regulation S provides a safe harbor from the registration requirements of the Securities Act for the offers and sales of securities by both foreign and domestic issuers that are made outside the United States. |
| REIT | Real Estate Investment Trust |
| USD-LIBOR-ICE | United States Dollar – London Inter-Bank Offered Rate – Intercontinental Exchange |
See accompanying notes to financial statements.
| 42 | NUVEEN |
JPI
| Nuveen Preferred and Income Term Fund |
||
| Portfolio of Investments |
January 31, 2017 (Unaudited) |
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| LONG-TERM INVESTMENTS – 138.7% (99.6% of Total Investments) |
| |||||||||||||||||||
| $25 PAR (OR SIMILAR) RETAIL PREFERRED – 40.6% (29.1% of Total Investments) |
| |||||||||||||||||||
| Banks – 5.9% | ||||||||||||||||||||
| 342,467 | Citigroup Inc., (3) |
7.125% | BB+ | $ | 9,578,802 | |||||||||||||||
| 15,100 | Countrywide Capital Trust III |
7.000% | BBB– | 384,295 | ||||||||||||||||
| 117,900 | Fifth Third Bancorp. |
6.625% | Baa3 | 3,294,126 | ||||||||||||||||
| 157,500 | Huntington BancShares Inc. |
6.250% | Baa3 | 4,072,950 | ||||||||||||||||
| 25,600 | PNC Financial Services |
6.125% | Baa2 | 726,016 | ||||||||||||||||
| 124,753 | Private Bancorp Incorporated |
7.125% | N/R | 3,209,895 | ||||||||||||||||
| 25,787 | Regions Financial Corporation |
6.375% | Ba1 | 658,600 | ||||||||||||||||
| 331,800 | Regions Financial Corporation, (3) |
6.375% | Ba1 | 8,951,964 | ||||||||||||||||
| 19,600 | U.S. Bancorp. |
6.500% | A3 | 573,300 | ||||||||||||||||
| 41,069 | Zions Bancorporation |
6.300% | BB– | 1,110,916 | ||||||||||||||||
| Total Banks |
32,560,864 | |||||||||||||||||||
| Capital Markets – 4.2% | ||||||||||||||||||||
| 79,600 | Goldman Sachs Group, Inc. |
5.500% | Ba1 | 2,038,556 | ||||||||||||||||
| 394,400 | Morgan Stanley |
7.125% | Ba1 | 11,342,944 | ||||||||||||||||
| 235,300 | Morgan Stanley |
6.875% | Ba1 | 6,480,162 | ||||||||||||||||
| 71,300 | Northern Trust Corporation |
5.850% | BBB+ | 1,839,540 | ||||||||||||||||
| 54,750 | State Street Corporation |
5.350% | Baa1 | 1,394,483 | ||||||||||||||||
| Total Capital Markets |
23,095,685 | |||||||||||||||||||
| Consumer Finance – 1.5% | ||||||||||||||||||||
| 140,445 | Discover Financial Services |
6.500% | BB– | 3,623,481 | ||||||||||||||||
| 185,926 | GMAC Capital Trust I |
8.125% | B+ | 4,778,298 | ||||||||||||||||
| Total Consumer Finance |
8,401,779 | |||||||||||||||||||
| Diversified Financial Services – 0.3% | ||||||||||||||||||||
| 71,600 | KKR Financial Holdings LLC |
7.375% | BBB | 1,862,316 | ||||||||||||||||
| Food Products – 3.4% | ||||||||||||||||||||
| 205,400 | CHS Inc., (3) |
7.875% | N/R | 5,882,656 | ||||||||||||||||
| 161,100 | CHS Inc., (3) |
7.100% | N/R | 4,428,639 | ||||||||||||||||
| 141,800 | CHS Inc. |
6.750% | N/R | 3,822,928 | ||||||||||||||||
| 24,000 | Dairy Farmers of America Inc., 144A, (4) |
7.875% | Baa3 | 2,517,751 | ||||||||||||||||
| 20,500 | Dairy Farmers of America Inc., 144A, (4) |
7.875% | Baa3 | 2,198,625 | ||||||||||||||||
| Total Food Products |
18,850,599 | |||||||||||||||||||
| Insurance – 10.9% | ||||||||||||||||||||
| 69,425 | Arch Capital Group Limited |
6.750% | BBB | 1,764,089 | ||||||||||||||||
| 432,500 | Aspen Insurance Holdings Limited, (3) |
5.950% | BBB– | 11,353,125 | ||||||||||||||||
| 62,000 | Aspen Insurance Holdings Limited |
5.625% | BBB– | 1,426,000 | ||||||||||||||||
| 108,900 | Axis Capital Holdings Limited |
5.500% | BBB | 2,454,606 | ||||||||||||||||
| 61,100 | Delphi Financial Group, Inc., (4) |
7.376% | BB+ | 1,367,113 | ||||||||||||||||
| 147,600 | Hartford Financial Services Group Inc. |
7.875% | BBB– | 4,498,848 | ||||||||||||||||
| 395,100 | Kemper Corporation |
7.375% | Ba1 | 10,509,660 | ||||||||||||||||
| 323,546 | Maiden Holdings Limited, (3) |
8.250% | BB | 8,402,490 | ||||||||||||||||
| 163,333 | Maiden Holdings NA Limited |
7.750% | BBB– | 4,411,624 | ||||||||||||||||
| 205,000 | Reinsurance Group of America Inc., (3) |
6.200% | BBB | 5,778,950 | ||||||||||||||||
| 239,900 | Reinsurance Group of America, Inc., (3) |
5.750% | BBB | 6,429,320 | ||||||||||||||||
| 74,800 | Torchmark Corporation |
6.125% | BBB+ | 1,923,856 | ||||||||||||||||
| Total Insurance |
60,319,681 | |||||||||||||||||||
| Mortgage Real Estate Investment Trusts – 0.5% | ||||||||||||||||||||
| 114,600 | Wells Fargo REIT |
6.375% | BBB+ | 2,989,914 | ||||||||||||||||
| NUVEEN | 43 |
| JPI | Nuveen Preferred and Income Term Fund | |||
| Portfolio of Investments (continued) | January 31, 2017 (Unaudited) | |||
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| Oil, Gas & Consumable Fuels – 1.4% | ||||||||||||||||||||
| 84,700 | Nustar Energy LP |
8.500% | Ba3 | $ | 2,261,490 | |||||||||||||||
| 219,800 | Nustar Logistics Limited Partnership |
7.625% | Ba2 | 5,714,800 | ||||||||||||||||
| Total Oil, Gas & Consumable Fuels |
7,976,290 | |||||||||||||||||||
| U.S. Agency – 12.5% | ||||||||||||||||||||
| 143,400 | AgriBank FCB, (4) |
6.875% | BBB+ | 15,272,100 | ||||||||||||||||
| 155,800 | Cobank Agricultural Credit Bank, (4) |
6.250% | BBB+ | 15,852,650 | ||||||||||||||||
| 40,797 | Cobank Agricultural Credit Bank, (4) |
6.200% | BBB+ | 4,147,272 | ||||||||||||||||
| 242 | Farm Credit Bank of Texas, (4) |
6.750% | Baa1 | 25,420,498 | ||||||||||||||||
| 172,400 | Federal Agricultural Mortgage Corporation |
6.875% | N/R | 4,723,760 | ||||||||||||||||
| 146,600 | Federal Agricultural Mortgage Corporation |
6.000% | N/R | 3,881,968 | ||||||||||||||||
| Total U.S. Agency |
69,298,248 | |||||||||||||||||||
| Total $25 Par (or similar) Preferred Securities (cost $214,850,191) |
225,355,376 | |||||||||||||||||||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| CORPORATE BONDS – 10.8% (7.8% of Total Investments) |
||||||||||||||||||||
| Banks – 7.3% | ||||||||||||||||||||
| $ | 2,630 | Bank of America Corporation |
6.250% | N/A (5) | BB+ | $ | 2,745,720 | |||||||||||||
| 6,550 | Bank of America Corporation |
6.300% | N/A (5) | BB+ | 7,008,500 | |||||||||||||||
| 5,390 | ING Groep N.V, (6) |
6.500% | N/A (5) | BBB– | 5,221,563 | |||||||||||||||
| 9,955 | JP Morgan Chase & Company |
5.300% | N/A (5) | BBB– | 10,228,763 | |||||||||||||||
| 12,110 | JP Morgan Chase & Company |
6.750% | N/A (5) | BBB– | 13,253,305 | |||||||||||||||
| 2,110 | M&T Bank Corporation |
6.450% | N/A (5) | Baa2 | 2,278,800 | |||||||||||||||
| 38,745 | Total Banks |
40,736,651 | ||||||||||||||||||
| Capital Markets – 2.1% | ||||||||||||||||||||
| 11,735 | Goldman Sachs Group Inc. |
5.375% | N/A (5) | Ba1 | 11,969,700 | |||||||||||||||
| Diversified Financial Services – 0.6% | ||||||||||||||||||||
| 3,360 | BNP Paribas, 144A, (6) |
7.625% | N/A (5) | BBB– | 3,528,000 | |||||||||||||||
| Food Products – 0.3% | ||||||||||||||||||||
| 1,410 | Land O Lakes Capital Trust I, 144A, (3) |
7.450% | 3/15/28 | Ba1 | 1,582,725 | |||||||||||||||
| Insurance – 0.5% | ||||||||||||||||||||
| 2,105 | Security Benefit Life Insurance Company, 144A, (3) |
7.450% | 10/01/33 | BBB | 2,543,312 | |||||||||||||||
| $ | 57,355 | Total Corporate Bonds (cost $58,170,128) |
60,360,388 | |||||||||||||||||
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| $1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 87.3% (62.7% of Total Investments) |
| |||||||||||||||||||
| Banks – 37.0% | ||||||||||||||||||||
| $ | 2,450 | Australia and New Zealand Banking Group Limited of the United Kingdom, 144A, (6) |
6.750% | N/A (5) | Baa1 | $ | 2,599,536 | |||||||||||||
| 2,600 | Banco Bilbao Vizcaya Argentaria S.A, Reg S, (6) |
9.000% | N/A (5) | BB | 2,712,580 | |||||||||||||||
| 600 | Banco Santander SA, Reg S, (6) |
6.375% | N/A (5) | Ba1 | 562,380 | |||||||||||||||
| 6,125 | Bank of America Corporation |
6.500% | N/A (5) | BB+ | 6,569,063 | |||||||||||||||
| 1,557 | Bank of America Corporation |
8.000% | N/A (5) | BB+ | 1,607,603 | |||||||||||||||
| 4,000 | Barclays Bank PLC, 144A |
10.180% | 6/12/21 | A– | 5,008,828 | |||||||||||||||
| 16,080 | Barclays PLC, (6) |
8.250% | N/A (5) | BB+ | 16,781,184 | |||||||||||||||
| 11,205 | Citigroup Inc. |
6.125% | N/A (5) | BB+ | 11,770,853 | |||||||||||||||
| 8,435 | Citigroup Inc. |
5.875% | N/A (5) | BB+ | 8,698,594 | |||||||||||||||
| 4,540 | Citizens Financial Group Inc. |
5.500% | N/A (5) | BB+ | 4,554,755 | |||||||||||||||
| 4,895 | Cobank Agricultural Credit Bank |
6.250% | N/A (5) | BBB+ | 5,159,849 | |||||||||||||||
| 4,265 | Commerzbank AG, 144A |
8.125% | 9/19/23 | BBB | 4,894,088 | |||||||||||||||
| 6,439 | Credit Agricole SA, 144A, (6) |
8.125% | N/A (5) | BB+ | 6,845,301 | |||||||||||||||
| 44 | NUVEEN |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| Banks (continued) | ||||||||||||||||||||
| $ | 4,250 | Credit Agricole, S.A, 144A, (6) |
6.625% | N/A (5) | BB+ | $ | 4,180,938 | |||||||||||||
| 4,351 | HSBC Capital Funding LP, Debt, 144A |
10.176% | N/A (5) | Baa1 | 6,461,235 | |||||||||||||||
| 3,790 | HSBC Holdings PLC, (6) |
6.875% | N/A (5) | BBB | 4,025,101 | |||||||||||||||
| 10,485 | Intesa Sanpaolo SpA, 144A, (3), (6) |
7.700% | N/A (5) | Ba3 | 9,606,881 | |||||||||||||||
| 3,670 | KeyCorp |
5.000% | N/A (5) | Baa3 | 3,491,088 | |||||||||||||||
| 22,045 | Lloyds Banking Group PLC, (6) |
7.500% | N/A (5) | BB+ | 22,867,056 | |||||||||||||||
| 3,860 | M&T Bank Corporation |
5.125% | N/A (5) | Baa2 | 3,773,922 | |||||||||||||||
| 4,390 | Nordea Bank AB, 144A, (6) |
6.125% | N/A (5) | BBB | 4,263,788 | |||||||||||||||
| 4,855 | PNC Financial Services Inc. |
6.750% | N/A (5) | Baa2 | 5,334,431 | |||||||||||||||
| 4,895 | PNC Financial Services |
5.000% | N/A (5) | Baa2 | 4,821,575 | |||||||||||||||
| 3,435 | Royal Bank of Scotland Group PLC, (6) |
7.500% | N/A (5) | BB– | 3,331,950 | |||||||||||||||
| 3,360 | Royal Bank of Scotland Group PLC, (6) |
8.625% | ||||||||||||||||||