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The Convenience of Stocks...With Attractive Tax-Free Dividends
It's not what you earn, it's what you keep. You know the toll federal, state
and local taxes can take on your investment income and portfolio performance.
And, you know that investments in tax-free municipal bonds can help you keep
more of what you earn.
What’s the best way to take advantage of the benefits tax-free bonds can offer?
For many, the answer may be Nuveen Municipal Closed-End Funds – investments
that combine the attractive, dependable, tax-free income of municipal bonds
with the listed liquidity, flexibility and convenience of common stocks.
Nuveen Municipal Closed-End Funds can help you meet a wide range of investment
goals, including:
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the ability to meet current obligations with dependable, monthly tax-free
income
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potential to achieve attractive, long-term after-tax total returns (income plus
or minus any share price appreciation or depreciation)
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diversify a portfolio otherwise comprised of taxable fixed-income and equity
securities and reduce the amount of investment income subject to taxes
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Tax-Free
Yield |
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4.50% |
5.00% |
5.50% |
6.00% |
 |
| Tax Rate |
Taxable Equivalent Yield |
| 25% |
6.00% |
6.67% |
7.33% |
8.00% |
| 28% |
6.25% |
6.94% |
7.64% |
8.33% |
| 33% |
6.72% |
7.46% |
8.21% |
8.96% |
| 35% |
6.92% |
7.69% |
8.46% |
9.23% |
As this chart shows, you would need to earn much more from a taxable investment
to match the yield of a municipal bond on an after-tax basis. The taxable
equivalent yield is the yield you would need to earn on a taxable investment to
equal the specified tax-free yield, at the indicated rate. This chart is for
illustrative purposes only and is not intended to reflect past or predict
future performance for any particular investment.
Monthly Dividends All Nuveen Municipal Closed-End Funds pay monthly
tax-free dividends directly to you or to your brokerage or bank accounts.
Convenient Reinvestment You can use your dividends to buy additional fund
shares automatically, compounding your investment and providing potentially
more tax-free income in the future.
Easy Liquidity You can purchase or sell common shares daily at their
current price on the New York or American Stock Exchange, in an active
secondary market. Like most other investments, share prices will fluctuate with
the market and at the time of sale may be worth more or less than either the
original purchase price or the current net asset value.
Credit Quality Almost all of Nuveen Municipal Closed-End Funds invest
primarily in municipal bonds rated in one of the top four categories
established by Moody's or Standard &Poor's, or in unrated bonds judged by
Nuveen to be of equivalent quality. If you're looking for additional security,
several Nuveen Municipal Closed-End Funds offer insured portfolios, with the
timely payment of principal and interest guaranteed by insurers, or fully
backed by escrow accounts containing U.S. Government or agency securities.*
*Insurance relates specifically to the payment of principal and interest on the
bonds in the portfolio and not to the value of the Fund's shares. No assurance
can be given about the insurer's ability to meet its commitments. This
insurance is not an obligation of the U.S. Government. State-specific insured
Funds are available for California, Florida, and New York only.
Portfolio Flexibility Since the number of common shares the Fund issues
is fixed, the Fund's managers don't need to maintain substantial,
lower-yielding cash reserves to meet day-to-day redemptions. They're also not
forced to buy or sell bonds at inopportune times as cash comes into or moves
out of the Fund. This helps to stabilize portfolio earnings and support steady
dividend distributions.
All Nuveen Municipal Closed-End Funds are managed with Nuveen's value investing
philosophy-a disciplined, systematic approach to bond selection and portfolio
construction designed to provide the tax-free income you need to pursue your
investment goals.
Our value investing approach avoids subjective predictions about inflation, the
economy or interest rates. These factors affect the prices and yields of all
bonds, of course, but they are also beyond anyone's control.
Instead of trying to guess market directions, our goal is to identify individual
bonds with current yields, prices, credit quality, and future prospects that
make them seem underpriced or exceptionally attractive when compared to other
bonds in the market, and that have the potential to perform well under varying
market conditions.
Successful value investing depends on detailed insight into both the outlook for
individual issuers and the characteristics of specific bonds - information that
may in some cases go beyond the common knowledge used by the market as a whole.
That's where Nuveen has an important edge. Over the years, we've developed a
team of experienced portfolio managers supported by the fundamental research of
skilled bond analysts.
The investment opportunities identified by our team can help position Nuveen
Funds for enhanced performance if the market discovers values we have already
seen.
Investing in any long-term municipal bond investment, like a Nuveen Municipal
Closed-End Fund, carries certain risks.
These include (but are not limited to):
Interest Rate Risk- Prices of municipal bonds tend to fall as interest
rates rise and rise as interest rates fall. Bonds with longer maturities tend
to fluctuate more in price in response to such changes. Most Nuveen Municipal
Bond Funds tend to invest in longer term bonds, which means that their net
asset values will fluctuate more in response to changes in interest rates than
a Fund investing in shorter-term securities.
Credit Risk-Credit risk refers to an issuer's ability to make payments of
principal and interest when due. An interruption in the timely payment of
principal and interest may adversely affect a Fund's net asset value and
ability to pay dividends.
Market Price-The shares of Closed-End Funds often trade at discount from
their net asset value, and at the time of sale may be trading on the stock
exchange at prices that are more or less than the purchase price or net asset
value.
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