One of the Flexible Pricing Options offered by Nuveen Mutual Funds. An investor purchasing C shares does not pay an up-front sales charge so that the entire purchase amount is invested in fund shares. However, an investor pays ongoing 12b-1 distribution and service fees, as well as a sales charge (a Contingent Deferred Sales Charge, or "CDSC") if shares are redeemed within a certain period after purchase.
The date at which some bonds are redeemable by the issuer prior to the maturity date. In the event of a refunded security, a pre-refunded date will appear in place of any call date and will be indicated by an R = pre-refunded; or an E = escrowed to maturity.
The right but not the obligation to buy a given security within a particular time, or on a specified date, at a specified price.
A dollar amount, usually stated as a percentage of the principal amount called, paid as a "penalty" or a "premium" for the exercise of a call provision.
The specified price at which a bond will be redeemed or called prior to maturity, typically either at a premium (above par value) or at par.
A provision in a bond's indenture (the legal agreement between the borrower and the lender) setting a certain period of time during which the bond cannot be redeemed by the issuer.
Clause in a debt instrument (such as a bond) which allows its issuer to redeem it before its maturity date, usually on one or more call dates specified in its indenture. Also called redemption provision.
The possibility that callable bonds will be redeemed prior to maturity.
Subject to payment of the principal amount (and accrued interest) prior to the stated maturity date, with or without payment of a call premium. Bonds can be callable under a number of different circumstances, including at the option of the issuer, or on a mandatory or extraordinary basis.
A bond whose issuer reserves the right to redeem (or "call") it before it is due. This feature represents a risk to the investor in that bonds are generally called when interest rates fall, and thus usually can't be replaced with a similarly yielding issue of the same quality.
An increase in the value or price of a security.
Capital Gain Distribution
A payment to fund shareholders of net capital gains realized on the sale of the fund's portfolio securities. The net asset value of the fund is reduced by the amount of the distribution.
The difference between the sales price of a capital asset, such as a closed-end fund, mutual fund, stock, bond, or other security, and the cost basis of the asset. If the sales price is higher than the cost basis, there is a capital gain. If the sales price is lower than the cost basis, there is a capital loss. Short-term capital gain refers to a gain on assets owned for one year or less. Long-term capital gain refers to a gain on assets owned for more than one year. Net capital gains generated by a mutual fund from the sale of securities in its portfolio are distributed to shareholders, usually once a year in December.
See capital appreciation.
Capital Return Plan
A fund that has adopted a capital return plan undertakes to return to shareholders a portion of the fund’s common assets, over a period of time, through supplemental amounts included in the fund’s regular monthly or quarterly distributions. Distribution sources under the plan have historically included net investment income and return of capital, and may also include realized gains. You should not draw any conclusions about a fund’s past or future investment performance from its current distribution rate. If a distribution includes anything other than net investment income, the fund provides a notice (often referred to as a “19a Notice”) of the best estimate of its distribution sources at the time of the distribution. A return of capital is a non-taxable distribution of a portion of a fund’s capital. A distribution including return of capital does not necessarily reflect a fund’s investment performance and should not be confused with “yield” or “income.”
The specific mix of a company's debt and equity. Debt generally comes in the form of bond issues or notes payable, while equity is classified as common stock, preferred stock or retained earnings.
A company's long-term debt plus its equity plus its retained earnings.
The cost of borrowing funds to finance an underwriting or trading position. A positive carry happens when the rate on the securities being financed is greater than the rate on the funds borrowed. A negative carry is when the rate on the funds borrowed is greater than the rate on the securities that are being financed.
A strategy that involves borrowing at a comparatively low rate and investing in a security that pays a higher rate.
A short-term money-market instrument, such as a Treasury bill or repurchase agreement, of such high liquidity that it is virtually as good as cash.
The movement of money into or out of a business, project, or financial product. It is usually measured during a specified, limited period of time.
Cash-flow based distribution
A fund that adopts a cash-flow based distribution policy seeks to establish a monthly distribution that roughly corresponds to the net cash flow received from investments in portfolio securities.
Cboe Volatility Index (the “VIX”)
Cboe Volatility Index (the “VIX”) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, the VIX has been considered by many to be the world’s premier barometer of investor sentiment and market volatility.
Cash deposits as well as short-term bank deposits, money market instruments, and U.S. Treasury bills.
Certificate of Deposit (CD)
An FDIC-insured, interest-bearing debt instrument issued by a bank, which requires the depositor to keep the money invested for a stated period of time.
Citigroup Currency-Hedged World Government Bond Index
An unmanaged market-capitalization weighted index that tracks the performance of the government bond markets of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, Portugal, Spain, Sweden, Switzerland, the United Kingdom and the United States. Index returns assume reinvestment of distributions, but do not reflect any applicable sales charges or management fees. It is not possible to invest directly in an index.
Citigroup Non-U.S. World Government Bond 1-3 Year Index
The Index is an index of fixed rate government bonds with a maturity of one year or longer and amounts outstanding of at least U.S. $25 million. Index returns assume reinvestment of distributions, but do not reflect any applicable sales charges or management fees.
Citigroup Non-U.S. World Government Bond Index
A market-weighted index designed to reflect the performance of the government fixed-income markets of 20 non-U.S. developed countries as of January 1999. Index returns assume reinvestment of distributions, but do not reflect any applicable sales charges or management fees. It is not possible to invest directly in an index.
A closed end fund is a type of investment company that, like a mutual fund, uses a professional manager to invest the fund's assets in a diversified selection of securities. The fund is closed end, which means a limited number of shares are issued during an Initial Public Offering (IPO). Fund shares are then bought and sold on an exchange and may be purchased in regular brokerage accounts, retirement plan accounts, and trust or custodial accounts.
Contingent Capital Securities (CoCos)
Debt or capital securities of primarily non-U.S. issuers with loss absorption contingency mechanisms built into the terms of the security, for example a mandatory conversion into common stock of the issuer, or a principal write-down, which if triggered would likely cause the CoCo investment to lose value. Loss absorption mechanisms would become effective upon the occurrence of a specified contingency event, or at the discretion of a regulatory body. Specified contingency events, as identified in the CoCo’s governing documents, usually reference a decline in the issuer’s capital below a specified threshold level, and/or certain regulatory events. A loss absorption contingency event for CoCos would likely be the result of, or related to, the deterioration of the issuer’s financial condition and/or its status as a going concern. In such a case, with respect to CoCos that provide for conversion into common stock upon the occurrence of the contingency event, the market price of the issuer’s common stock received by the holder of the CoCo will have likely declined, perhaps substantially, and may continue to decline after conversion. CoCos rated below investment grade should be considered high yield securities, or “junk,” but often are issued by entities whose more senior securities are rated investment grade. CoCos are a relatively new type of security; and there is a risk that CoCo security issuers may suffer the sort of future financial distress that could materially increase the likelihood (or the market’s perception of the likelihood) that an automatic write-down or conversion event on those issuers’ CoCos will occur. Additionally, the trading behavior of a given issuer’s CoCo may be strongly impacted by the trading behavior of other issuers’ CoCos, such that negative information from an unrelated CoCo security may cause a decline in value of one or more CoCos held by the Fund. Accordingly, the trading behavior of CoCos may not follow the trading behavior of other types of debt and preferred securities. Despite these concerns, the prospective reward vs. risk characteristics of at least certain CoCos may be very attractive relative to other fixed-income alternatives.
Assets or property pledged by a borrower to secure a loan. The assets or property may be seized by the lender if the borrower defaults.
Collateralized Debt Obligations (CDOs)
Collateralized debt obligations are a type of asset-backed security constructed from a portfolio of fixed-income assets. CDOs usually are divided into different tranches having different ratings and paying different interest rates. Losses, if any, are applied in reverse order of seniority and so junior tranches generally offer higher coupons to compensate for added default risk.
Commercial Mortgage-Backed Securities (CMBS)
Commercial mortgage-backed securities are backed by cash flows of a mortgage or pool of mortgages on commercial real estate. CMBS generally are structured to provide protection to the senior class investors against potential losses on the underlying mortgage loans. CMBS are typically characterized by the following: i) loans on multi-family housing, non-residential property, ii) payments based on the amortization schedule of 25–30 years with a balloon payment due usually after 10 years, and iii) restrictions on prepayments.
Corporate promissory notes issued to provide short-term financing, sold at a discount and redeemed at face value.
The Commercial Property Price Index
The Commercial Property Price Index from Green Street Advisors is a time series of unleveraged U.S. commercial property values that captures the prices at which commercial real estate transactions are currently being negotiated and contracted. Features that differentiate this index are its timeliness, its emphasis on high-quality properties, and its ability to capture changes in the aggregate value of the commercial property sector.
The fee an agent or broker receives for arranging the purchase or sale of a fund, closed-end fund share, stock, bond or other security.
A physical good, such as an agricultural product or metal, that is interchangeable with other goods of the same type. Commodity futures (contracts for the future delivery of a standardized amount of the commodity) are traded on exchanges such as the Chicago Board of Trade.
Commodity Research Bureau (CRB) Index
The Commodity Research Bureau (CRB) Index acts as a representative indicator of today’s global commodity markets. It measures the aggregated price direction of various commodity sectors. The index comprises a basket of 19 commodities, with 39% allocated to energy contracts, 41% to agriculture, 7% to precious metals and 13% to industrial metals. The CRB is designed to isolate and reveal the directional movement of prices in overall commodity trades.
A security that represents ownership in a company.
The growth that comes from investment income and gains on both the original principal and the reinvested income and capital gains of an investment.
Fractional discount from the public offering price of new securities at which the underwriter sells the bonds to dealers not in the syndicate.
A record of recent transactions sent to you when distributions are paid or other business is transacted. Short for confirmation.
Consumer Price Index (CPI)
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
A corporate bond that can be exchanged for a specified amount of the company's common or preferred stock, usually at the option of the bondholder, at certain times during the life of the bond.
Similar to duration, convexity is a measure of a security’s sensitivity to interest rates. However, where duration provides a linear approximation, convexity is a quadratic approximation that measures how duration changes with changes in yield. Investors are particularly concerned with convexity in environments where yield movements are large or for asset classes that are especially sensitive to interest rates, such as US MBS pass-throughs.
A relatively short-term drop in stock prices, usually defined as a decline of 10% or more from the stock market's high.
Statistical measure of how two securities move in relation to each other. Perfect positive correlation (a correlation co-efficient of +1) implies that as one security moves the other security will move in lockstep, in the same direction. Alternatively, perfect negative correlation (a correlation co-efficient of -1) means that securities will move by an equal amount in the opposite direction. If the correlation is 0, the movements of the securities are said to have no correlation; their movements in relation to one another are completely random.
The cost of an investment, used as the basis for calculating and reporting capital gains or losses. It is adjusted for stock splits, distributions, and return of capital.
The interest rate that an issuer promises to pay over the life of a debt security, such as a bond, expressed as a percentage of face value. Common practice is to pay half the annual rate semiannually.
A promise in an indenture, or any other formal debt agreement, that certain activities will or will not be carried out.
An evaluation of the creditworthiness of a debt security by an independent rating service such as Moody's, Fitch, or Standard & Poor's.
The potential for default by an issuer on its obligation to pay interest or principal on debt securities. U.S. government securities are usually considered to have very little credit risk.
The difference between the interest notes of securities that are identical in all material respects except for quality rating.
Credit Suisse Leveraged Loan Index
Credit Suisse (“CS”) Leveraged Loan (“LL”) is an index designed to mirror the investable universe of the $US-denominated leveraged loan market.
Current Distribution Rate
See Current market distribution rate.
Current Market Distribution Rate
For a closed-end fund, the ratio of the most recent distribution paid by the fund divided by the market price of the fund as of the date of the calculation, multiplied by the number of distribution payments made in a year.
The rate of return on a bond based on the ratio of the bond's coupon income to its market price assuming the investor holds the bond to maturity. The calculation assumes that coupon payments can be reinvested at the same rate as the current yield.
A nine-digit identifier used to uniquely identify every security publicly traded in the United States.
The bank or trust that holds assets (stocks, bonds, cash, and other securities) and handles payments and receipts for the fund's securities transactions.
Stocks of companies whose main business experiences regular ups and downs in activity due to cyclical changes in the economy. The auto, chemical, paper, and steel industries, for example, are considered cyclical because their earnings tend to fall when the economy slows and increase when the economy is growing. Food and drug stocks are generally considered to be non-cyclical, since food and medical care needs continue no matter what economic conditions are.