Closed-end funds are typically designed for regular cash flow potential, providing investors attractive, regular distributions that are fueled by the funds’ total returns and other sources. The regular distributions can be received as cash to help investors meet current obligations, or they can be reinvested in additional fund shares.

Nuveen closed-end funds are actively managed by experienced portfolio managers, supported by the fundamental research of specialized, skilled securities analysts. Our managers each use a disciplined, systematic approach to security selection to design portfolios that can provide attractive, regular cash flow from strategies seeking to benefit from a variety of market environments.

The asset base for closed-end funds is relatively stable and generally fully invested.  Without the pressure of constantly investing or redeeming securities based on investor demands, closed-end funds may be able to take better advantage of longer-term and less liquid securities or markets.

Closed-end funds often borrow money to leverage their portfolios to try to enhance distribution levels and boost performance for shareholders under certain conditions.  As long as the short-term interest rates paid to lenders are lower than the long-term rates earned by the underlying fund's portfolio, net of borrowing costs, the common shareholders of the fund will earn higher returns that they would have without leverage.

However, with leverage there is also enhanced risk - if the short-term rates paid to the lenders approach the return earned by the fund’s portfolio, the beneficial effects of leverage will be reduced and the positive return available to common shareholders will decline. In addition, the net asset value per common share typically will be more volatile for leveraged funds than those of comparable unleveraged funds.  This may lead to more volatile distribution levels and/or market share prices.

Investors who want to buy or sell fund shares do not purchase or redeem directly from the fund - rather, they buy or sell fund shares on the stock exchange in a process identical to the purchase or sale of any other listed stock. All the trading strategies associated with stocks, such as market orders, limit orders, stop orders, short sales, and margin buying can be used in the purchase and sale of closed-end funds. A stock exchange listing means that closed-end fund shares may be bought or sold at any time during the trading day, and the price is updated throughout the trading day, not just at the close. Like other investments, share prices will fluctuate with the market and may be worth more or less at the time of sale than the original purchase price.

Due to the minimal marketing expenses typical of closed-end funds, and their lower turnover, they tend to have relatively low operating costs. However, investors must still pay a brokerage commission to purchase and sell shares for all closed-end funds. For those investors who trade frequently, this can significantly increase the cost of investing in the funds. This means closed-end funds may have lower expense internally, but an investor’s total costs may not be lower.