Key concepts of closed-end funds

Key Benefits

• Designed for income: Nuveen’s professional distribution management approach seeks, but does not guarantee, to offer smooth, sustainable and tax-efficient distributions, while also seeking to protect shareholders’ original capital.
• Broad opportunity for diversification: Access to a range of asset classes and strategies, including alternatives, can enhance income portfolio diversification.
• Enhanced flexibility: The CEF structure enables fully invested portfolios, with greater flexibility to pursue attractive portfolio investments with less of an impact on liquidity as there is no need to hold cash for redemptions.

Closed-end funds have long been valued for the potential to provide attractive income. Since launching its first closed-end fund in 1987, Nuveen has led the way in new structures, forms of leverage, education, and support.

What is a closed-end fund?

A closed-end fund is a publicly traded investment company that invests in a variety of securities, like stocks and bonds. The fund raises capital primarily through an initial public offering (IPO), and CEF shares and the proceeds are invested according to the fund's investment objectives.

After the IPO, a closed-end fund is listed on a national exchange, where shares can readily be bought from or sold to other investors throughout the trading day, much like a stock. The market price of a closed-end fund is determined by market supply and demand and can change throughout the day.

These four concepts are key to understanding the value of closed-end funds:

1. Portfolio: The CEF structure enables access to a wide range of portfolio investments, including alternatives 
2. Fund structure and leverage: Many CEFs employ modest financial leverage to increase return and distribution potential 
3. Professional distribution management: Nuveen seeks to fully convert a fund’s total return into smooth, attractive distributions over time 
4. Exchange listing: Share prices are set by supply and demand