Tax-exempt income | Multi-asset model portfolios

Overview
Target allocations
Performance
Characteristics
Portfolio statistics
Literature
Management

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Key distinctions

Strategic, forward-looking outcome-focused approach informed by Nuveen's global market views and deep municipal expertise to help deliver income while minimizing downside risk
Simplified diversification strategies to help achieve investors' income and risk objectives in an increasingly volatile and complex municipal market
Broad municipal fund offering from an industry leader providing diversified access to Nuveen's municipal market thought leadership and research capabilities

An active approach to diversified tax-exempt income

Nuveen's forward-thinking approach to portfolio construction leverages 125 years as a leader in the municipal bond industry to help achieve outcomes that align with investors’ tax-exempt income objectives while seeking to minimize downside risk.

Highlights

In June, the Fed left the Fed Funds rate unchanged. In its projections, the Fed no longer projects a rate cut in 2026.
In Q2 2026, municipal-to-Treasury ratios declined across the curve. The 5-, 10- and 30-year ratios declined by 6%, 7% and 8%. Ratios ended the quarter at 60%, 65% and 83%, respectively. High yield municipal spreads widened by twenty basis points during the quarter. High yield credit fundamentals remain attractive.
Year-to-date, municipal bonds have seen $53 billion in net flows, this is the second highest year-to-date flow total for this point in the year since Lipper began reporting flows in 1992, trailing only 2021. $45 billion has gone into investment grade while $8 billion has been allocated to high yield.
Our forecast now predicts a higher-rate, steeper-curve environment going forward, with sustained upward pressure on long-term yields. This shift is driven primarily by our revised short-term rate 5Y assumption. As the model incorporated a higher expected policy path, it flowed through to higher projected yields across the curve, with the long end reflecting both the elevated rate path and the associated term premium. Based on these market dynamics, the changes we made are slightly more defensive against potentially higher long-term rates, with a focus on reducing duration in the models. We made the following adjustments across our models: In the Moderate model, reduced Nuveen All-American Municipal Bond and reallocated to Nuveen Intermediate Duration Municipal Bond and Nuveen Limited Term Municipal Bond. In the High-Income model, we trimmed Nuveen All-American Municipal Bond and increased Nuveen Intermediate Duration Municipal Bond and Nuveen Short Duration High Yield Municipal Bond.

Target allocations

LOWER

HIGHER

POTENTIAL VOLATILITY AND YIELD

Performance

Yield is represented by the weighted average SEC 30-day yield of the blended model portfolio. The SEC 30-day yield is computed under an SEC standardized formula and is based on the maximum offer price per share. The Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis at a specified tax rate. If the comparison were instead to investments that generate qualified dividend income, which is taxable at a rate lower than an individual’s ordinary graduated tax rate, the Fund’s Taxable-equivalent yield would be lower. The Taxable-equivalent yield is based on the Fund’s SEC 30-day yield on the indicated date and a federal income tax rate of 40.8% (maximum federal income tax rate and the Medicare tax). Investors should consider their own tax rate when investing in municipal bonds.

Performance data shown represents past performance and does not predict or guarantee future results. Performance shown is based on the composite. The value of the portfolio will fluctuate based on the value of the underlying securities. Individual returns may vary based on factors such as the account type, market value, cash flows and fees. Current performance is preliminary and may be higher or lower than the performance shown. Final numbers are available upon request. Tota lreturns for a period of less than one year are cumulative.

Some income may be subject to state and local taxes and to the federal alternative minimum tax. Capital gains, if any, are subject to tax.

S&P Municipal Bond Index is shown for reference purposes only. These Nuveen model portfolios are designed to achieve an outcome, in this case different levels of tax-exempt income for different levels of risk. They are not designed to outperform or track a particular benchmark or index.

Expense ratios are represented by the weighted average expense ratio of the blended model portfolio and are based on the Funds’ most recent fiscal year end. Please see the underlying fund prospectuses for details.

Characteristics

Sector allocation
Maturity profile
Bond credit quality

Sector allocation is represented by the weighted average sector allocation of the blended model portfolio.

Credit quality is represented by the weighted average credit quality of the blended model portfolio. Ratings shown are the highest rating given by one of the following national rating agencies: S&P, Moody’s or Fitch. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC/CC/C and D are below-investment grade ratings. U.S. government securities, if owned by the Fund, are included in the U.S. Treasury/Agency category (included only if applicable). Holdings designated NR are not rated by these national rating agencies.

Portfolio statistics

Conservative
Moderate
High

Conservative

Portfolio statistics are represented by the weighted average statistics of the blended model portfolio.

Moderate

Portfolio statistics are represented by the weighted average statistics of the blended model portfolio.

High

Portfolio statistics are represented by the weighted average statistics of the blended model portfolio.

Literature

Portfolio managers

Nazar Suschko Ph.D., FRM

Portfolio Manager

Important information on risk

Model portfolios

Nuveen model portfolios (“models”) are intended to illustrate how combinations of Nuveen affiliated products could be used to achieve the stated investment objectives. Results are inherently limited and do not represent actual results and may not account for the impact of the general market. Models are not automatically rebalanced; allocations may not achieve model objectives and are not guaranteed. Both the actual underlying Funds and model allocations may vary. Allocations are reviewed periodically and may change based on Nuveen's strategic and tactical views. There are no management or other fees at the model level; however fees apply for the underlying Funds as outlined in each Fund’s prospectus. The models’ risks are directly related to those of the underlying Funds, as described below. Allocations may not match a client’s actual experience from an account managed in accordance with the model portfolio allocation.

Important information on risk

Investing involves risk; principal loss is possible. Debt or fixed income securities such as those held by the funds, are subject to market risk, credit risk, interest rate risk, call risk, tax risk, political and economic risk, and income risk. As interest rates rise, bond prices fall. Credit risk refers to an issuers ability to make interest and principal payments when due. The models concentrate in non-investment-grade and unrated bonds with long and short maturities and durations which carry heightened credit risk, liquidity risk, and potential for default. In addition, the funds oftentimes engage in a significant amount of portfolio leverage and in doing so, assumes a high level of risk in pursuit of its objectives. Leverage involves the risk that the funds could lose more than its original funding amount and also increases the exposure to volatility, interest rate risk and credit risk.

Portfolio allocations will be principally to funds managed by affiliates and to affiliated sub-advisers, which may present a conflict of interest.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

FRM® (Financial Risk Manager) is a trademark owned by the Global Association of Risk Professionals.

manTEIMFnote

Before investing, carefully consider fund investment objectives, risks, charges and expenses. For this and other information that should be read carefully, please request a prospectus or summary prospectus from your financial professional or Nuveen at 800.257.8787.

Featuring portfolio management by Nuveen Asset Management, LLC, an affiliate of Nuveen, LLC.

Nuveen Securities, LLC, member FINRA and SIPC.

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