Strategies

CEF

Equity : Real Assets

About Real Assets

Real Assets are tangible raw materials, goods, property, buildings, roads, and other constructed items that are consumed, used to manufacture other items, or used to live in, work in, transport people and goods, and provide basic services like clean water, cellular service, and electricity. Real assets include commodities, real estate and REITs, infrastructure, pipelines, and collectibles. To encourage investments in these often-essential projects, governments sometimes grant special tax treatment to the returns or cash flows of some of these projects.

Real assets are generally considered to be inflation hedges, since when the costs of goods and services rise (inflation increases), so does the demand for raw materials, energy, and physical systems also typically rise. In addition, they have historically had low correlations with traditional financial assets such as stocks and bonds.

About REITs

Many real estate investments seek to provide attractive, growing dividends. A Real Estate Investment Trust (REIT) is a company that owns, and usually operates, income-producing commercial real estate, such as apartments, shopping centers, offices, hotels and warehouses. Most REITs are publicly-traded.

A real estate investment trust is a tax designation for a corporate entity which can invest in real estate. The overall purpose of REITs designation is to reduce corporate income taxes, and in return REITs are required to distribute 90% of their taxable income to shareholders.

Historically, real estate investments such as REITs often have had relatively low correlations with other types of investments. Their total return typically relies on both cash flows from rents, and any capital appreciation.

REIT performance is linked to the performance of the commercial real estate market. Property values and rents may fall due to economic, legal, or cultural developments. In addition, REITs depend on liquid credit markets, and there may also be special risks associated with particular sectors of the commercial real estate market.

For additional explanation please visit NAREITs (the National Association of Real Estate Investment Trusts).

Nuveen Real Estate Income Fund (JRS)
The fund invests at least 90% of its total assets in income producing common stocks, preferred stocks, convertible preferred stocks and debt securities issued by real estate companies; at least 80% of its total assets in income producing equity securities issued by REITs; and will not invest more than 25% of its total assets in non-investment grade preferred stocks, convertible preferred stocks and debt securities. The fund uses leverage.

About Infrastructure

Infrastructure refers to physical constructed items such as roads, bridges, water treatment, communications transmission, prisons, and other projects and systems that are needed or desired to support a country’s or business’s economic development. Infrastructure projects may be funded publicly, privately, or through public-private partnerships.

Demand for financing infrastructure is influenced by worldwide population growth, urbanization, economic recovery, and maintenance and modernization of existing infrastructure.

The total return of infrastructure investments typically relies on cash flows from tolls or usage fees, as well as potential capital appreciation (when structured as an equity or stock) or pay back of principal (when structured as a bond or debt obligation).

Like REITs, values, rents, and usage fees may fall due to economic, legal, or cultural developments. Some infrastructure investments may have smaller capitalization and thus lower liquidity, and global infrastructure investments may be subject to additional risks associated with emerging markets and different legal and financial systems.

Nuveen Real Asset Income and Growth Fund (JRI)
    Under normal market conditions, JRI’s Managed Assets will be invested:
  • At least 80% in equity and debt securities issued by real asset related companies located anywhere in the world.
  • No more than 40%, at the time of purchase, in debt securities.
  • All of the Fund’s debt securities may be rated lower than investment grade quality (BB+/Ba1 or lower); no more than 10% the Fund’s Managed Assets may be invested in debt securities rated CCC+/Caa1 or lower at any time.
  • At least 25% and no more than 75% in securities of non-U.S. issuers through the direct investment in securities of non-U.S. companies and depositary receipts.1

JRI will employ, to a limited extent, an integrated and dynamic option writing strategy focused on securities issued by real asset related companies that seeks to generate option premiums for the purpose of enhancing the Fund’s risk-adjusted total returns over time. Initially, the notional value of the options will range from 5% to 10% of Managed Assets.2

{1} A negotiable financial instrument issued by a bank to represent a foreign company’s publicly traded securities. The depositary receipt trades on a local stock exchange.

{2} Over extended periods of time, the notional value of the call options written by the Fund may range from 0% to 25% of Managed Assets, depending on market conditions and Nuveen Asset Management’s ongoing assessment of the attractiveness of writing call options from a risk- adjusted return standpoint. There can be no assurance that the Fund’s options strategy will be successful. The Fund’s risk-adjusted returns over any particular period may be positive or negative.

Investor Profile

Are these CEFs right for you?

The features and investment objectives of these funds might be especially appealing to investors seeking:
  • Potential for enhanced portfolio returns;
  • High current income potential;
  • Opportunity for capital growth.

What are potential risks of REITS?

  • REIT performance is linked to the performance of the commercial real estate market. Property values and rents may fall due to economic, legal, or cultural developments.
  • REITs depend on liquid credit markets, and there may also be special risks associated with particular sectors of the commercial real estate market.

Real Asset Funds


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