UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
| Investment Company Act file number | 811-21137 |
Nuveen Preferred and Income Securities Fund
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive, Chicago, IL 60606
(Address of principal executive offices) (Zip code)
Gifford R. Zimmerman
Nuveen Investments
333 West Wacker Drive, Chicago, IL 60606
(Name and address of agent for service)
Registrant’s telephone number, including area code: (312) 917-7700
Date of fiscal year end: July 31
Date of reporting period: January 31, 2018
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policy making roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss.3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
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Semi-Annual Report January 31, 2018
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| Nuveen Preferred and Income Opportunities Fund |
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| Nuveen Preferred and Income Securities Fund |
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| Nuveen Preferred and Income 2022 Term Fund | ||||||
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to Shareholders
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Comments
Nuveen Preferred and Income Opportunities Fund (JPC)
Nuveen Preferred and Income Term Fund (JPI)
Nuveen Preferred and Income Securities Fund (JPS)
Nuveen Preferred and Income 2022 Term Fund (JPT)
Nuveen Asset Management, LLC (NAM) and NWQ Investment Management Company, LLC (NWQ), both affiliates of Nuveen LLC, are sub-advisers for the Nuveen Preferred and Income Opportunities Fund (JPC). NAM and NWQ each manage approximately half of the Fund’s investment portfolio. Douglas Baker, CFA and Brenda Langenfeld, CFA, are the portfolio managers for the NAM team. The NWQ income-oriented investment team is led by Thomas J. Ray, CFA and Susi Budiman, CFA. The Nuveen Preferred and Income Term Fund (JPI) features management by NAM, an affiliate of Nuveen LLC. Douglas Baker, CFA, and Brenda Langenfeld, CFA, have served as the Fund’s portfolio managers since its inception. The Nuveen Preferred and Income Securities Fund (JPS) is sub-advised by a team of specialists at Spectrum Asset Management, a wholly owned subsidiary of Principal Global Investors, LLC. Mark Lieb and Phil Jacoby lead the team. The Nuveen Preferred and Income 2022 Term Fund (JPT) features management by NAM. Douglas Baker, CFA, and Brenda Langenfeld, CFA, have served as the Fund’s portfolio managers since its inception.
Effective September 29, 2017 as approved by the Fund’s Board of Trustees, the Nuveen Preferred Income Opportunities Fund’s name was changed to the Nuveen Preferred and Income Opportunities Fund. Also effective September 29, 2017, the Fund will invest at least 80% of the sum of its net assets and the amount of any borrowings for investment purposes in preferred and other income producing securities, including hybrid securities such as contingent capital securities and up to 20% opportunistically in other income-oriented securities such as corporate and taxable municipal debt and dividend paying common equity.
Effective September 29, 2017 as approved by the Fund’s Board of Trustees, the Nuveen Preferred Securities Income Fund’s name was changed to the Nuveen Preferred and Income Securities Fund.
This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her advisors.
Certain statements in this report are forward-looking statements. Discussions of specific investments are for illustration only and are not intended as recommendations of individual investments. The forward-looking statements and other views expressed herein are those of the portfolio managers as of the date of this report. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements and the views expressed herein are subject to change at any time, due to numerous market and other factors. The Funds disclaim any obligation to update publicly or revise any forward-looking statements or views expressed herein.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s (S&P), Moody’s Investors Service, Inc. (Moody’s) or Fitch, Inc. (Fitch). This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings, while BB, B, CCC, CC, C and D are below investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
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Portfolio Managers’ Comments (continued)
Also effective September 29, 2017, the Fund will invest at least 80% of the sum of its net assets and the amount of any borrowings for investment purposes in preferred and other income producing securities, including hybrid securities such as contingent capital securities.
What key strategies were used to manage the Funds during this six-month reporting period ended January 31, 2018 and how did these strategies influence performance?
Nuveen Preferred and Income Opportunities Fund (JPC)
The table in the Performance Overview and Holding Summaries section of this report provides total return performance for the Fund for the six-month, one-year, five-year and ten-year periods ended January 31, 2018. For the six-month reporting period ended January 31, 2018, the Fund’s common shares at net asset value (NAV) outperformed the ICE BofAML U.S. All Capital Securities Index and the JPC Blended Benchmark.
JPC had a policy requiring it to invest at least 80% of its managed assets in preferred securities and contingent capital securities (sometimes referred to as “CoCos”), and permitting it to invest up to 20% opportunistically over the market cycle in other types of securities, primarily income oriented securities such as corporate and taxable municipal debt and common equity. JPC is managed by two experienced portfolio teams with distinctive, complementary approaches to the preferred market, each managing its own “sleeve” of the portfolio. NAM employs a debt-oriented approach that combines top down relative value analysis of industry sectors with fundamental credit analysis. NWQ’s investment process identifies undervalued securities within a company’s capital structure that offer the most attractive risk/reward potential. This multi-team approach gives investors access to a broader investment universe with greater diversification potential.
NAM
For the portion of the Fund managed by NAM, the Fund seeks to achieve its investment objective of providing a high level of current income and total return by investing in preferred securities and other income producing securities, including but not limited to contingent capital securities (CoCos). The Fund’s portfolio is actively managed, seeking to capitalize on strong and continuously improving credit fundamentals across the issuer base, the category’s healthy yield level and inefficiencies that often evolve between the $25 par retail and the $1,000 par institutional sides of the market. The Fund’s strategy has a bias toward the highly regulated industries, like utilities, banks and insurance companies, in hopes of benefitting from the added scrutiny of regulatory oversight.
NAM employs a credit-based investment approach, using a top-down process to position the portfolio in a manner that reflects the investment team’s overall macro-economic outlook, while also incorporating a bottom-up approach that includes fundamental credit research, security structure selection, and option adjusted spread (OAS) analysis. The process begins with identifying the investable universe of $1,000 par and $25 par securities. In an effort to capitalize on the inefficiencies between different investor bases within this universe, NAM tactically and strategically shifts capital between the $25 par exchange listed market and the $1,000 par over-the-counter market. Periods of volatility may drive notably different valuations between these two markets, as will periods where valuations trend in one direction for an extended period of time. This dynamic is often related to differences in how retail and institutional markets perceive and price risk, as well as differences in retail and institutional investors’ ability to source substitute investments. Technical factors such as new issue supply may also influence the relative valuations between $25 par exchange listed structures and $1,000 par over-the-counter structures.
For the six-month reporting period, the Fund’s Blended Benchmark Index, which represents the combined preferred securities and CoCos markets, returned 2.02% which fell between both comparable financial senior debt and financial equities. NAM typically expects the Blended Benchmark Index to perform between these two categories given the hybrid nature of its constituent securities. Investment performance was not dispersed evenly across the various
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sub-categories within the Blended Benchmark Index. For example, during the reporting period, both $25 par securities and securities with fixed rate coupons posted negative returns, while securities with coupons that have reset features, $1,000 par securities, and CoCos all posted positive returns over the same timeframe. Option adjusted spreads (OAS) for the Blended Benchmark Index tightened materially during the measurement period. The move in OAS was due primarily to relatively light new issue supply, historically strong bank balance sheets and continued profitability, a positive trend in global macro-economic data, the resolution by the European Central Bank (ECB) of several nagging headlines within the European bank sector and generally speaking, higher government benchmark bond yields both in the U.S and abroad.
NAM incorporated several active themes within the Fund relative to its benchmark during the reporting period, including an overweight to U.S.-domiciled issuers, an underweight to CoCos, an overweight to the $1,000 par side of the market and an overweight to securities that have coupons with reset features (floating rate, fixed-to-floating rate, fixed-to-fixed rate).
During the reporting period, the overweight to U.S.-domiciled issuers detracted modestly from performance relative to the Blended Benchmark Index, as non-U.S.-domiciled issuers outperformed over the last six months. Taking a closer look at the U.S. versus non-U.S. allocation, the underweight to non-U.S. issuers again was almost entirely due to an underweight to CoCos. As of January 31, 2018, the Fund had an allocation of around 29% to contingent capital securities, still well below the 40% allocation within the Blended Benchmark Index. Admittedly, while still a meaningful underweight versus the index, NAM increased the Fund’s allocation to these securities by approximately 8% during the reporting period. Positive developments within the European bank sector disproportionately benefited European banks and non-U.S. domiciled issuers, and as a result, the CoCos market.
While the non-U.S. segment of the market posted a positive total return during the reporting period, the U.S. segment of the market fared worse, posting a negative total return. Most of the negative return for the U.S. segment was realized during January 2018, when domestic interest rates pushed meaningfully higher. Up until that point, the return for the U.S. segment had been trending in positive territory. Supply out of U.S. banks continued to be very light, supporting valuations in the secondary market, as most U.S. banks already have met their regulatory Additional Tier-1 Capital requirements. From a fundamental standpoint, U.S. banks continued to be incredibly profitable, while maintaining capital levels still well above regulatory requirements. Despite supportive technical and strong fundamentals, the push higher in U.S. rates during January 2018 was more than enough to overwhelm the cumulative returns of the preceding five months combined.
Given the outperformance in the $1,000 par institutional side of the market during the reporting period, our overweight to $1,000 par structures contributed to the Fund’s relative performance. As has been the case for several quarters, NAM maintained an overweight to $1,000 par securities for two primary reasons, relative value and interest rate risk management. First, the $1,000 par side of the market continues to be significantly cheaper than the $25 par side of the market on an option adjusted spread (OAS) basis. Retail investors historically have demonstrated a strong bias for income-generating investment solutions. Couple this natural bias with a prolonged period of low interest rates and retail demand for income has only grown increasingly intense. Within the preferred securities universe, the $25 par side of the market is arguably best positioned to benefit from retail demand. The small size is more manageable for retail investors versus $1,000 par structures and securities that trade on an exchange are easier for retail to source than those traded over-the-counter. Unfortunately, many retail investors lack the wherewithal to calculate relative value metrics such as yield-to-worst and OAS, and instead often focus only on the size of a particular security’s coupon. Therefore, it is no surprise that in this environment, the retail investor has driven $25 par security valuations to such very rich levels versus $1,000 par valuations.
Second, NAM’s overweight to $1,000 par securities allows NAM to gain greater exposure to securities that have coupons with reset features, like floating rate coupons, fixed-to-floating rate coupons and fixed-to-fixed rate coupons.
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Portfolio Managers’ Comments (continued)
These structures are more common on the institutional $1,000 par side of the market and help to mitigate duration and duration extension risk during a rising interest rate environment. Duration extension is a significant risk for callable securities with fixed-rate coupons. As of January 31, 2018, the Fund had about 87% of its assets invested in securities that have coupons with reset features, compared to approximately 70% within the Blended Benchmark Index.
As an aside, NAM believes we may be witnessing the sprouts of a new technical relationship developing between the $25 par and $1,000 par markets. Over the past few months, NAM has witnessed a trend in the preferred exchange-traded fund (ETF) market where $1,000 par strategies have been driving positive net investor flows, while $25 par strategies generally have experienced net outflows. NAM will keep a close eye on this dynamic as ETF flows have played a meaningful role in relative valuations between the $25 and $1,000 par markets. As existing $1,000 par ETFs attract more investor assets, and as more $1,000 par strategies come on-line, this dynamic could be a catalyst for shrinking the gap in valuations between $25 par and $1,000 par securities.
NWQ
For the portion of the Fund managed by NWQ, NWQ seeks to achieve high income and a measure of capital appreciation. While the Fund’s investments are primarily preferred securities, a portion of the Fund allows the flexibility to invest across the capital structure in any type of debt, preferred or equity securities offered by a particular company. The portfolio management team then evaluates all available investment choices within a selected company’s capital structure to determine the portfolio investment that may offer the most favorable risk-adjusted return potential. The Fund’s portfolio is constructed with an emphasis on seeking a sustainable level of income and an overall analysis for downside risk management.
During the reporting period, NWQ’s preferred, equity, investment grade corporate bonds holdings contributed to performance, while high yield holdings slightly detracted from performance. Several sectors contributed to the Fund’s performance, in particular NWQ’s holdings in the financials and utilities sectors, while the insurance sector was the largest detractor.
Several of NWQ’s holdings performed well during the reporting period. A top contributor to performance for the reporting period was a Viacom Inc. corporate bond. In November 2017, Viacom worked on its debt reduction efforts by announcing a $1 billion tender offer. Credit spreads tightened upon this announcement as gross leverage declined to under 3.5x after the tender offer. The long duration of the bond also contributed to performance as long term interest rates declined during the reporting period. Another top contributor to performance was a Kindred Healthcare Inc. high yield bond. The company provides a range of health care services that includes operating hospitals, nursing centers, institutional pharmacies and contract rehabilitation services throughout the United States. The price of the bond jumped after the company announced in mid-December 2017 that it has entered into a definitive agreement to be acquired by a consortium of three companies (TPG, Welsh Carson and Humana). Given that this senior note is not callable nor does it carry a change of control covenant, it is expected that the make whole call provision, a provision that allows the issuer to pay off remaining debt early, will be exercised after the deal closes (expect summer of 2018, subject to shareholder and regulatory approvals). Lastly, a CVR Partners, LP high yield bond contributed to performance. CVR is a Master Limited Partnership (MLP) that formed to own, operate and grow its nitrogen fertilizer business. NWQ expects ammonia, a material used to make nitrogen, pricing to remain near trough levels for the remainder of the year before rebounding in 2018 and beyond.
Individual positions that detracted from performance during the reporting period included Dish DBS Corporation senior notes. The drivers of the underperformance were continued concerns about a pending buildout of a wireless network. These concerns were augmented with potentially fewer buyers of spectrum as merger discussions took place between Sprint and T-Mobile. Additionally, the company’s satellite TV business had results that were worse than expected. While NWQ shares some of these concerns, NWQ believes the bonds offer a very attractive risk/reward particularly since the
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wireless spectrum has a value of up to two times the company’s debt outstanding. The investment in the preferred stock of telecommunication services holding, Frontier Communications Corporation, also detracted from performance. The company acquired assets from Verizon in California, Texas and Florida two years ago and the integration has gone worse than expected. Furthermore, weak earnings at Frontier and Windstream has already dampened the sentiment in the wireline telecom sector.
Nuveen Preferred and Income Term Fund (JPI)
The table in the Performance Overview and Holding Summaries section of this report provides total return performance for the Fund for the six-month, one-year, five-year and since inception periods ended January 31, 2018. For the six-month reporting period ended January 31, 2018, the Fund’s common shares at net asset value (NAV) outperformed the ICE BofAML U.S. All Capital Securities Index and the JPI Blended Benchmark Index.
The Fund seeks to achieve its investment objective of providing a high level of current income and total return by investing in preferred securities and other income producing securities, including but not limited to contingent capital securities (CoCos). The Fund’s portfolio is actively managed, seeking to capitalize on strong and continuously improving credit fundamentals across the issuer base, the category’s healthy yield level and inefficiencies that often evolve between the $25 par retail and the $1,000 par institutional sides of the market. The Fund’s strategy focuses opportunistically on highly regulated industries, like utilities, banks and insurance companies, with a current emphasis broadly on financial services companies.
NAM employs a credit-based investment approach, using a top-down process to position the portfolio in a manner that reflects the investment team’s overall macro-economic outlook, while also incorporating a bottom-up approach that includes fundamental credit research, security structure selection, and option adjusted spread (OAS) analysis. The process begins with identifying the investable universe of $1,000 par and $25 par securities. In an effort to capitalize on the inefficiencies between different investor bases within this universe, NAM tactically and strategically shifts capital between the $25 par exchange listed market and the $1,000 par over-the-counter market. Periods of volatility may drive notably different valuations between these two markets, as will periods where valuations trend in one direction for an extended period of time. This dynamic is often related to differences in how retail and institutional markets perceive and price risk, as well as differences in retail and institutional investors’ ability to source substitute investments. Technical factors such as new issue supply may also influence the relative valuations between $25 par exchange listed structures and $1,000 par over-the-counter structures.
For the six-month reporting period, the Fund’s Blended Benchmark Index, which represents the combined preferred securities and contingent capital securities markets, returned 2.02% which fell between both comparable financial senior debt and financial equities. NAM typically expects the Blended Benchmark Index to perform between these two categories given the hybrid nature of its constituent securities. Investment performance was not dispersed evenly across the various sub-categories within the Blended Benchmark Index. For example, during the reporting period, both $25 par securities and securities with fixed rate coupons posted negative returns, while securities with coupons that have reset features, $1,000 par securities, and contingent capital securities all posted positive returns over the same timeframe. Option adjusted spreads (OAS) for the Blended Benchmark Index tightened materially during the measurement period. The move in OAS was due primarily to relatively light new issue supply, historically strong bank balance sheets and continued profitability, a positive trend in global macro-economic data, the resolution by the European Central Bank (ECB) of several nagging headlines within the European bank sector, and generally speaking, higher government benchmark bond yields both here in the U.S. and abroad.
NAM incorporated several active themes within the Fund relative to its benchmark during the reporting period, including an overweight to U.S.-domiciled issuers, an underweight to CoCos, an overweight to the $1,000 par side of the
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Portfolio Managers’ Comments (continued)
market and an overweight to securities that have coupons with reset features (floating rate, fixed-to-floating rate, fixed-to-fixed rate).
During the reporting period, the overweight to U.S.-domiciled issuers detracted modestly from performance relative to the Blended Benchmark Index, as non-U.S.-domiciled issuers outperformed during the reporting period. Taking a closer look at the U.S. versus non-U.S. allocation, the underweight to non-U.S. issuers again was almost entirely due to an underweight to CoCos. As of January 31, 2018, the Fund had an allocation of around 29% to CoCos, still well below the 40% allocation within the Blended Benchmark Index. Admittedly, while still a meaningful underweight versus the index, NAM increased the Fund’s allocation to these securities by approximately 8% during the reporting period. Positive developments within the European bank sector disproportionately benefited European banks and non-U.S. domiciled issuers, and as a result, the CoCos market.
While the non-U.S. segment of the market posted a positive total return during the reporting period, the U.S. segment of the market fared worse, posting a negative total return over the same period. Most of the negative return for the U.S. segment was realized during January 2018, when domestic interest rates pushed meaningfully higher. Up until that point, the return for the U.S. segment had been trending in positive territory. Supply out of U.S. banks continued to be very light, supporting valuations in the secondary market, as most U.S. banks already have met their regulatory Additional Tier-1 Capital requirements. From a fundamental standpoint, U.S. banks continued to be incredibly profitable, while maintaining capital levels still well above regulatory requirements. Despite supportive technical and strong fundamentals, the push higher in U.S. rates during January 2018 was more than enough to overwhelm the cumulative returns of the preceding five months combined.
Given the outperformance in the $1,000 par institutional side of the market during the reporting period, our overweight to $1,000 par structures contributed to the Fund’s relative performance. As has been the case for several quarters, NAM maintained an overweight to $1,000 par securities for two primary reasons, relative value and interest rate risk management. First, the $1,000 par side of the market continues to be significantly cheaper than the $25 par side of the market on an OAS basis. Retail investors historically have demonstrated a strong bias for income-generating investment solutions. Couple this natural bias with a prolonged period of low interest rates, and retail demand for income has only grown increasingly intense. Within the preferred securities universe, the $25 par side of the market is arguably best positioned to benefit from retail demand. The small size is more manageable for retail investors versus $1,000 par structures, and securities that trade on an exchange are easier for retail to source than those traded over-the-counter. Unfortunately, many retail investors lack the wherewithal to calculate relative value metrics such as yield-to-worst and OAS, and instead often focus only on the size of a particular security’s coupon. Therefore, it is no surprise that in this environment, the retail investor has driven $25 par security valuations to such very rich levels versus $1,000 par valuations.
Second, NAM’s overweight to $1,000 par securities allows NAM to gain greater exposure to securities that have coupons with reset features, like floating rate coupons, fixed-to-floating rate coupons and fixed-to-fixed rate coupons. These structures are more common on the institutional $1,000 par side of the market, and help to mitigate duration and duration extension risk during a rising interest rate environment. Duration extension is a significant risk for callable securities with fixed-rate coupons. As of January 31, 2018, the Fund had about 87% of its assets invested in securities that have coupons with reset features, compared to approximately 70% within the Blended Benchmark Index.
NAM believes we may be witnessing the sprouts of a new technical relationship developing between the $25 par and $1,000 par markets. Over the past few months, NAM has witnessed a trend in the preferred exchange traded fund (ETF) market where $1,000 par strategies have been driving positive net investor flows, while $25 par strategies generally have experienced net outflows. NAM will keep a close eye on this dynamic as ETF flows have played a meaningful role in relative valuations between the $25 and $1,000 par markets. As existing $1,000 par ETFs attract more investor assets, and as more $1,000 par strategies come on-line, this dynamic could be a catalyst for shrinking the gap in valuations between $25 par and $1,000 par securities.
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Nuveen Preferred and Income Securities Fund (JPS)
The table in the Performance Overview and Holding Summaries section of this report provide total return performance for the Fund for the six-month, one-year, five-year and ten-year periods ended January 31, 2018. For the six-month reporting period ended January 31, 2018, the Fund’s common shares at net asset value (NAV) outperformed the ICE BofAML U.S. All Capital Securities Index and the JPS Blended Benchmark.
The investment objective of the Fund is to seek high current income consistent with capital preservation with a secondary objective to enhance portfolio value relative to the broad market for preferred securities. Under normal market conditions, the Fund seeks to invest at least 80% of its net assets in preferred securities and up to 20% of its net assets in debt securities, including convertible debt and convertible preferred securities.
The equity markets provided a supportive backdrop to the junior subordinated capital securities markets, which include preferred securities and contingent capital securities (CoCos) issued mostly by financials. The interest rate environment was also supportive being little changed until January 2018. Both bonds and equities benefited from very little concern that inflation would rise and upset either economic growth or the Federal Reserve Bank’s slow pace of rate increases. It was the combination of the 25 basis points increase in the federal funds rate together with stellar equity performance that began to convince more individual investors to take some profits after the New Year January 2018. Underlying asset performance in the Fund outpaced the common share price performance of the Fund as investors took profits come January after a very good overall calendar year in 2017.
Spectrum’s tactical overweight exposure to both institutional sectors of the junior subordinated capital securities, which includes both preferred and CoCos, benefited performance. A preferred security represents a capital security issued either through charter amendment (as a stock) or through indenture (as a bond). For preferred securities, any reorganization would be processed through a bankruptcy court. Preferred security payments are in priority to common stock dividends, yet can be deferred, which means payments are cumulative or they can be eliminated which means payments are non-cumulative without causing an immediate event of default. Any principal loss absorption on a preferred security would be forced through a statutory resolution in a bankruptcy proceeding. A CoCo represents a capital security issued through indenture. For CoCos, a reorganization would be processed through the contracts of its capital before falling into an actual bankruptcy. CoCo payments are non-cumulative and equal to common stock dividends and can be reduced or eliminated without causing an event of default. Principal loss absorption on a CoCo could be forced through a regulatory action in advance of any bankruptcy proceeding.
The Fund owns a blend of junior subordinated capital securities in the two segments, the preferred securities segment, represented by the ICE BofAML All Capital Securities Index, comprises approximately 62% of the Fund (including some cash) and the CoCo segment, represented by the ICE BofAML Contingent Capital Index comprises 38% of the Fund.
During the reporting period, the top three performing sub-sectors of the Fund were corporate hybrids, CoCos and insurance hybrids. The bottom three performing sub-sectors were $25 par baby bonds, $25 par preferred stock and $25 par hybrids.
Top performing holdings for the Fund during the reporting period included Lloyds Banking Group PLC 7.50%, SocGen 8% and Royal Bank of Scotland Group PLC 7.50%, which are all CoCos. Being overweight CoCos and underweight the $25 par sector benefited performance.
During the reporting period several individual securities detracted from performance. Most of the underperforming securities such as Qwest 7%, PNC Financial Services 6.12% and Allstate Corporation 5.12% were primarily concentrated in the retail sector, which detracted from total return during the reporting period.
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Portfolio Managers’ Comments (continued)
Nuveen Preferred and Income 2022 Term Fund (JPT)
The table in the Performance Overview and Holding Summaries section of this report provides total return performance for the Fund for the six-month, one-year and since inception periods ended January 31, 2018. For the six-month reporting period ended January 31, 2018, the Fund’s common shares at net asset value (NAV) underperformed the ICE BofAML U.S. All Capital Securities Index.
The Fund seeks to achieve its investment objective of providing a high level of current income and total return by investing in preferred securities and other income producing securities. The Fund’s portfolio is actively managed, seeking to capitalize on strong and continuously improving credit fundamentals across the issuer base, the category’s healthy yield level, and inefficiencies that often evolve between the $25 par retail and the $1,000 par institutional sides of the market. The Fund’s strategy has a bias toward the highly regulated industries, like utilities, banks and insurance companies, with a current emphasis broadly on financial services companies. The Fund does not invest in contingent capital securities (otherwise known as CoCos).
NAM employs a credit-based investment approach, using a top-down process to position the portfolio in a manner that reflects the investment team’s overall macro-economic outlook, while also incorporating a bottom-up approach that includes fundamental credit research, security structure selection, and option adjusted spread (OAS) analysis. The process begins with identifying the investable universe of $1,000 par and $25 par securities. In an effort to capitalize on the inefficiencies between different investor bases within this universe, NAM tactically and strategically shifts capital between the $25 par exchange listed market and the $1,000 par over-the-counter market. Periods of volatility may drive notably different valuations between these two markets, as will periods where valuations trend in one direction for an extended period of time. This dynamic is often related to differences in how retail and institutional markets perceive and price risk, as well as differences in retail and institutional investors’ ability to source substitute investments. Technical factors such as new issue supply may also influence the relative valuations between $25 par exchange listed structures and $1,000 par over-the-counter structures.
Within JPT, NAM incorporated a couple prominent active themes within the Fund relative to its benchmark during the reporting period, of particular note an overweight to the $1,000 par side of the market, and an overweight to securities that have coupons with reset features (floating rate, fixed-to-floating rate, fixed-to-fixed rate).
Given the outperformance in the $1,000 par institutional side of the market during the reporting period, our overweight to $1,000 par structures contributed to the Fund’s relative results. As has been the case for several quarters, NAM maintained an overweight to $1,000 par securities for two primary reasons, relative value and interest rate risk management. First, the $1,000 par side of the market continues to be significantly cheaper than the $25 par side of the market on an OAS basis. Retail investors historically have demonstrated a strong bias for income-generating investments. Couple this natural bias with a prolonged period of low interest rates, and retail demand for income solutions has only grown more intense. Within the preferred securities and contingent capital securities markets, the $25 par side of the market is arguably best positioned to benefit from retail demand. Unfortunately, many retail investors lack the wherewithal to calculate relative value metrics such as yield-to-worst and OAS, and instead often focus only on the size of a particular security’s coupon. Therefore, it is no surprise that this investor base has driven $25 par security valuations to such very rich levels versus $1,000 par valuations.
Second, our overweight to $1,000 par securities allows us to gain greater exposure to securities that have coupons with reset features, like floating rate coupons, fixed-to-floating rate coupons and fixed-to-fixed rate coupons. These structures are more common on the institutional $1,000 par side of the market, and help to mitigate duration and duration extension risk during a rising interest rate environment. Duration extension is a significant risk for callable securities with fixed-rate coupons. As of January 31, 2018, the Fund had about 83% of its assets invested in securities that have coupons with reset features.
| 12 | NUVEEN |
NAM believes we may be witnessing the sprouts of a new technical relationship developing between the $25 par and $1,000 par markets. During the reporting period, NAM has witnessed a trend in the preferred exchange traded fund (ETF) market where $1,000 par strategies have been driving positive net investor flows, while $25 par strategies generally have experienced net outflows. NAM will keep a close eye on this dynamic as ETF flows have played a meaningful role in relative valuations between the $25 and $1,000 par markets. As existing $1,000 par ETFs attract more investor assets, and as more $1,000 par strategies come on-line, this dynamic could be a catalyst for shrinking the gap in valuations between $25 par and $1,000 par securities.
Slightly detracting from JPT’s relative performance was an overweight to issuers in the industrial sector during the reporting period. JPT was overweight both GE and Viacom for most of the six-month reporting period. Idiosyncratic headlines for both companies weighed on valuations. NAM decided to exit their Viacom position before the end of the reporting period, but NAM maintains conviction that the headlines around GE are temporary in nature. NAM has conviction in GE as a credit and NAM finds the structural features of the specific GE security JPT owns to be compelling. That being said, NAM will remain vigilant with respect to monitoring the credit and NAM stands ready to reduce exposure should our fundamental opinion deteriorate from our current view.
JPT added short interest rate futures during the period to manage the Fund’s exposure to various points along the yield curve, with a net effect of decreasing the Fund’s overall interest rate sensitivity. These interest rate futures had a positive effect to overall Fund performance during the reporting period.
| NUVEEN | 13 |
Leverage
IMPACT OF THE FUNDS’ LEVERAGE STRATEGIES ON PERFORMANCE
One important factor impacting the returns of the Funds relative to their comparative benchmarks was the Funds’ use of leverage through the use of bank borrowings as well as the use of reverse repurchase agreements for JPC and JPS. The Funds use leverage because our research has shown that, over time, leveraging provides opportunities for additional income and total return for common shareholders. However, the use of leverage also can expose common shareholders to additional volatility. For example, as the prices of securities held by a Fund decline, the negative impact of these valuation changes on common share NAV and common shareholder total return is magnified by the use of leverage. Conversely, leverage may enhance common share returns during periods when the prices of securities held by a Fund generally are rising. The Funds’ use of leverage had a positive impact on performance during this reporting period.
JPC, JPI and JPS continued to utilize forward starting interest rate swap contracts to partially hedge the interest cost of leverage, which as mentioned previously, is through the use of bank borrowings. During this reporting period, these swap contracts contributed to overall Fund performance.
As of January 31, 2018, the Funds’ percentages of leverage are shown in the accompanying table.
| JPC | JPI | JPS | JPT | |||||||||||||
| Effective Leverage* |
33.79 | % | 27.72 | % | 33.21 | % | 20.00 | % | ||||||||
| Regulatory Leverage* |
28.41 | % | 27.72 | % | 28.68 | % | 20.00 | % | ||||||||
| * | Effective leverage is a Fund’s effective economic leverage, and includes both regulatory leverage and the leverage effects of certain derivative and other investments in a Fund’s portfolio that increase the Fund’s investment exposure. Regulatory leverage consists of preferred shares issued or borrowings of a Fund. Both of these are part of the Fund’s capital structure. A Fund, however, may from time to time borrow on a typically transient basis in connection with its day-to-day operations, primarily in connection with the need to settle portfolio trades. Such incidental borrowings are excluded from the calculation of a Fund’s effective leverage ratio. Regulatory leverage is subject to asset coverage limits set forth in the Investment Company Act of 1940. |
THE FUNDS’ LEVERAGE
Bank Borrowings
As noted above, the Funds employ regulatory leverage through the use of bank borrowings. The Funds’ bank borrowing activities are as shown in the accompanying table.
| Current Reporting Period | Subsequent to the Close of the Reporting Period |
|||||||||||||||||||||||||||||||||||
| Fund | August 1, 2017 | Draws | Paydowns | January 31, 2018 | Average Balance Outstanding |
Draws | Paydowns | March 26, 2018 | ||||||||||||||||||||||||||||
| JPC |
$ | 540,000,000 | $ | — | $ | (103,000,000 | ) | $ | 437,000,000 | $ | 441,478,261 | $ | — | $ | — | $ | 437,000,000 | |||||||||||||||||||
| JPI |
$ | 225,000,000 | $ | — | $ | — | $ | 225,000,000 | $ | 225,000,000 | $ | — | $ | — | $ | 225,000,000 | ||||||||||||||||||||
| JPS |
$ | 845,300,000 | $ | — | $ | — | $ | 845,300,000 | $ | 845,300,000 | $ | — | $ | — | $ | 845,300,000 | ||||||||||||||||||||
| JPT |
$ | 42,500,000 | $ | — | $ | — | $ | 42,500,000 | $ | 42,500,000 | $ | — | $ | — | $ | 42,500,000 | ||||||||||||||||||||
Refer to Notes to Financial Statements, Note 8 – Fund Leverage for further details.
Reverse Repurchase Agreements
As noted above, JPC and JPS utilized reverse repurchase agreements. The Fund’s transactions in reverse repurchase agreements are as shown in the accompanying table.
|
|
Current Reporting Period | Subsequent to the Close of the Reporting Period |
||||||||||||||||||||||||||||||||||
| Fund | August 1, 2017 | Purchases | Sales | January 31, 2018 | Average Balance Outstanding |
Purchases | Sales | March 26, 2018 | ||||||||||||||||||||||||||||
| JPC | $ | — | $ | 125,000,000 | $ | — | $ | 125,000,000 | $ | 125,000,000 | $ — | $ | — | $ | 125,000,000 | |||||||||||||||||||||
| JPS | $ | 200,000,000 | $ | — | $ | — | $ | 200,000,000 | $ | 200,000,000 | $ — | $ | — | $ | 200,000,000 | |||||||||||||||||||||
| 14 | NUVEEN |
Information
COMMON SHARE DISTRIBUTION INFORMATION
The following information regarding the Funds’ distributions is current as of January 31, 2018. Each Fund’s distribution levels may vary over time based on each Fund’s investment activity and portfolio investment value changes.
During the current reporting period, each Fund’s distributions to common shareholders were as shown in the accompanying table.
| Per Common Share Amounts | ||||||||||||||||
| Monthly Distributions (Ex-Dividend Date) | JPC | JPI | JPS | JPT | ||||||||||||
| August 2017 |
$ | 0.0650 | $ | 0.1415 | $ | 0.0620 | $ | 0.1275 | ||||||||
| September |
0.0650 | 0.1415 | 0.0620 | 0.1275 | ||||||||||||
| October |
0.0650 | 0.1415 | 0.0620 | 0.1275 | ||||||||||||
| November |
0.0650 | 0.1415 | 0.0620 | 0.1275 | ||||||||||||
| December |
0.0650 | 0.1415 | 0.0620 | 0.1275 | ||||||||||||
| January 2018 |
0.0650 | 0.1415 | 0.0620 | 0.1275 | ||||||||||||
| Total Distributions |
$ | 0.3900 | $ | 0.8490 | $ | 0.3720 | $ | 0.7650 | ||||||||
| Current Distribution Rate* |
7.95 | % | 7.11 | % | 7.88 | % | 6.49 | % | ||||||||
| * | Current distribution rate is based on the Fund’s current annualized monthly distribution divided by the Fund’s current market price. The Fund’s monthly distributions to its shareholders may be comprised of ordinary income, net realized capital gains and, if at the end of the fiscal year the Fund’s cumulative net ordinary income and net realized gains are less than the amount of the Fund’s distributions, a return of capital for tax purposes. |
Each Fund in this report seeks to pay regular monthly dividends out of their net investment income at a rate that reflects its past and projected net income performance. To permit each Fund to maintain a more stable monthly dividend, the Fund may pay dividends at a rate that may be more or less than the amount of net income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it will hold the excess in reserve as undistributed net investment income (UNII) as part of the Fund’s net asset value. Conversely, if a Fund has cumulatively paid in dividends more than it has earned, the excess will constitute a negative UNII that will likewise be reflected in the Fund’s net asset value. Each Fund will, over time, pay all its net investment income as dividends to shareholders.
As of January 31, 2018, JPS and JPT had positive UNII balances while JPC and JPI had zero UNII balances, based upon our best estimate, for tax purposes. JPC, JPI and JPS had negative UNII balances while JPT had a positive UNII balance for financial reporting purposes.
All monthly dividends paid by the Funds during the current reporting period, were paid from net investment income. If a portion of the Funds’ monthly distributions were sourced from or comprised of elements other than net investment income, including capital gains and/or a return of capital, shareholders would have received a notice to that effect. For financial reporting purposes, the composition and per share amounts of each Fund’s dividends for the reporting period are presented in this report’s Statement of Changes in Net Assets and Financial Highlights, respectively. For income tax purposes, distribution information for each Fund as of its most recent tax year end is presented in Note 6 – Income Tax Information within the Notes to Financial Statements of this report.
COMMON SHARE REPURCHASES
During August 2017, the Funds’ Board of Trustees reauthorized for JPC, JPI and JPS and authorized for JPT an open-market share repurchase program, allowing each Fund to repurchase an aggregate of up to approximately 10% of its outstanding shares.
| NUVEEN | 15 |
Common Share Information (continued)
As of January 31, 2018, and since the inception of the Funds’ repurchase programs, the Funds have cumulatively repurchased and retired their outstanding common shares as shown in the accompanying table.
| JPC | JPI | JPS | JPT | |||||||||||||
| Common shares cumulatively repurchased and retired |
2,826,100 | 0 | 0 | 0 | ||||||||||||
| Common shares authorized for repurchase |
10,335,000 | 2,275,000 | 20,380,000 | 680,000 | ||||||||||||
During the current reporting period, the Funds did not repurchase any of their outstanding common shares.
OTHER COMMON SHARE INFORMATION
As of January 31, 2018, and during the current reporting period, the Funds’ common share prices were trading at a premium/(discount) to their common share NAVs as shown in the accompanying table.
| JPC | JPI | JPS | JPT | |||||||||||||
| Common share NAV |
$ | 10.66 | $ | 25.78 | $ | 10.32 | $ | 24.89 | ||||||||
| Common share price |
$ | 9.81 | $ | 23.88 | $ | 9.44 | $ | 23.58 | ||||||||
| Premium/(Discount) to NAV |
(7.97 | )% | (7.37 | )% | (8.53 | )% | (5.26 | )% | ||||||||
| 6-month average premium/(discount) to NAV |
(3.28 | )% | (3.57 | )% | (1.36 | )% | (0.51 | )% | ||||||||
| 16 | NUVEEN |
Considerations
Fund shares are not guaranteed or endorsed by any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation.
Nuveen Preferred and Income Opportunities Fund (JPC)
Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Lower credit debt securities may be more likely to fail to make timely interest or principal payments. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. Certain types of preferred or debt securities with special loss absorption provisions, such as contingent capital securities (CoCos), may be or become so subordinated that they present risks equivalent to, or in some cases even greater than, the same company’s common stock. These loss absorption features work to the benefit of the security issuer, not the investor. These and other risk considerations such as concentration and foreign securities risk are described in more detail on the Fund’s web page at www.nuveen.com/JPC.
Nuveen Preferred and Income Term Fund (JPI)
Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Lower credit debt securities may be more likely to fail to make timely interest or principal payments. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. Certain types of preferred or debt securities with special loss absorption provisions, such as contingent capital securities (CoCos), may be or become so subordinated that they present risks equivalent to, or in some cases even greater than, the same company’s common stock. These loss absorption features work to the benefit of the security issuer, not the investor. For these and other risks, including the Fund’s limited term and concentration risk, see the Fund’s web page at www.nuveen.com/JPI.
Nuveen Preferred and Income Securities Fund (JPS)
Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. Certain types of preferred or debt securities with special loss absorption provisions, such as contingent capital securities (CoCos), may be or become so subordinated that they present risks equivalent to, or in some cases even greater than, the same company’s common stock. These loss absorption features work to the benefit of the security issuer, not the investor. These and other risks such as concentration and foreign securities risk are described in more detail on the Fund’s web page at www.nuveen.com/JPS.
| NUVEEN | 17 |
Risk Considerations (continued)
Nuveen Preferred and Income 2022 Term Fund (JPT)
Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Lower credit debt securities may be more likely to fail to make timely interest or principal payments. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. For these and other risks, including the Fund’s limited term and concentration risk, see the Fund’s web page at www.nuveen.com/JPT.
| 18 | NUVEEN |
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| NUVEEN | 19 |
JPC
Nuveen Preferred and Income Opportunities Fund
Performance Overview and Holding Summaries as of January 31, 2018
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
Average Annual Total Returns as of January 31, 2018
| Cumulative | Average Annual | |||||||||||||||
| 6-Month | 1-Year | 5-Year | 10-Year | |||||||||||||
| JPC at Common Share NAV | 1.68% | 10.80% | 8.09% | 6.63% | ||||||||||||
| JPC at Common Share Price | (3.82)% | 6.61% | 8.09% | 7.77% | ||||||||||||
| ICE BofAML U.S. All Capital Securities Index | 0.26% | 7.07% | 6.32% | 4.42% | ||||||||||||
| JPC Blended Benchmark | 0.62% | 7.87% | 5.83% | 4.58% | ||||||||||||
Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment. Performance for indexes that were created after the Fund’s inception are linked to the Fund’s previous benchmark.
Common Share Price Performance — Weekly Closing Price
| 20 | NUVEEN |
This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. 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. Holdings designated N/R are not rated by these national rating agencies.
| 1 | Includes 0.8% (as a percentage of total investments) in emerging market countries. |
| NUVEEN | 21 |
JPI
Nuveen Preferred and Income Term Fund
Performance Overview and Holding Summaries as of January 31, 2018
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
Average Annual Total Returns as of January 31, 2018
| Cumulative | Average Annual | |||||||||||||||
| 6-Month | 1-Year | 5-Year | Since Inception |
|||||||||||||
| JPI at Common Share NAV | 2.56% | 13.02% | 8.80% | 9.95% | ||||||||||||
| JPI at Common Share Price | (1.75)% | 7.74% | 7.99% | 8.01% | ||||||||||||
| ICE BofAML U.S. All Capital Securities Index | 0.26% | 7.07% | 6.32% | 7.44% | ||||||||||||
| JPI Blended Benchmark | 2.02% | 10.08% | 6.05% | 6.41% | ||||||||||||
Since inception returns are from 7/26/12. Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.
Common Share Price Performance — Weekly Closing Price
| 22 | NUVEEN |
This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. 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. Holdings designated N/R are not rated by these national rating agencies.
| 1 | Includes 1.4% (as a percentage of total investments) in emerging market countries. |
| NUVEEN | 23 |
JPS
Nuveen Preferred and Income Securities Fund
Performance Overview and Holding Summaries as of January 31, 2018
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
Average Annual Total Returns as of January 31, 2018
| Cumulative | Average Annual | |||||||||||||||
| 6-Month | 1-Year | 5-Year | 10-Year | |||||||||||||
| JPS at Common Share NAV | 2.94% | 14.50% | 8.88% | 6.44% | ||||||||||||
| JPS at Common Share Price | (4.93)% | 5.65% | 8.04% | 5.99% | ||||||||||||
| ICE BofAML U.S. All Capital Securities Index | 0.26% | 7.07% | 6.32% | 6.72% | ||||||||||||
| JPS Blended Benchmark | 2.02% | 10.08% | 6.05% | 5.34% | ||||||||||||
Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment. Performance for indexes that were created after the Fund’s inception are linked to the Fund’s previous benchmark.
Common Share Price Performance — Weekly Closing Price
| 24 | NUVEEN |
This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. 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. Holdings designated N/R are not rated by these national rating agencies.
| 1 | Includes 2.4% (as a percentage of total investments) in emerging market countries. |
| NUVEEN | 25 |
JPT
Nuveen Preferred and Income 2022 Term Fund
Performance Overview and Holding Summaries as of January 31, 2018
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.
Average Annual Total Returns as of January 31, 2018
| Cumulative | Average Annual | |||||||||||||||
| 6-Month | 1-Year | Since Inception |
||||||||||||||
| JPI at Common Share NAV | 0.13% | 7.06% | 6.73% | |||||||||||||
| JPI at Common Share Price | (3.68)% | 0.13% | (0.26)% | |||||||||||||
| ICE BofAML U.S. All Capital Securities Index | 0.26% | 7.07% | 7.24% | |||||||||||||
Since inception returns are from 1/26/17. Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.
Common Share Price Performance — Weekly Closing Price
| 26 | NUVEEN |
This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.
For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. 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. Holdings designated N/R are not rated by these national rating agencies.
| 1 | Includes 1.8% (as a percentage of total investments) in emerging market countries. |
| NUVEEN | 27 |
JPC
| Nuveen Preferred and Income Opportunities Fund |
||
| January 31, 2018 (Unaudited) |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| LONG-TERM INVESTMENTS – 147.7% (98.7% of Total Investments) |
| |||||||||||||||||||
| $1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 68.6% (45.8% of Total Investments) |
| |||||||||||||||||||
| Automobiles – 1.7% | ||||||||||||||||||||
| $ | 17,805 | General Motors Financial Company Inc. |
5.750% | N/A (3) | BB+ | $ | 18,383,662 | |||||||||||||
| Banks – 33.2% | ||||||||||||||||||||
| 33,945 | Bank of America Corporation, (4) |
6.500% | N/A (3) | BBB– | 37,975,968 | |||||||||||||||
| 9,265 | Bank of America Corporation |
6.300% | N/A (3) | BBB– | 10,376,800 | |||||||||||||||
| 3,535 | Bank of America Corporation |
8.000% | N/A (3) | BBB– | 3,582,475 | |||||||||||||||
| 1,895 | Bank of America Corporation, (5) |
8.125% | N/A (3) | BBB– | 1,932,900 | |||||||||||||||
| 3,575 | Barclays Bank PLC, 144A, (5) |
10.180% | 6/12/21 | A– | 4,313,942 | |||||||||||||||
| 10,675 | CIT Group Inc., Series A |
5.800% | N/A (3) | B+ | 10,888,500 | |||||||||||||||
| 16,975 | Citigroup Inc. |
6.250% | N/A (3) | BB+ | 18,460,312 | |||||||||||||||
| 8,885 | Citigroup Inc. |
6.125% | N/A (3) | BB+ | 9,394,999 | |||||||||||||||
| 805 | Citigroup Inc. |
5.950% | N/A (3) | BB+ | 840,219 | |||||||||||||||
| 13,690 | Citigroup Inc. |
5.875% | N/A (3) | BB+ | 14,169,150 | |||||||||||||||
| 2,925 | Citigroup Inc. |
5.800% | N/A (3) | BB+ | 3,031,031 | |||||||||||||||
| 8,414 | Citizens Financial Group Inc. |
5.500% | N/A (3) | BB+ | 8,642,861 | |||||||||||||||
| 4,690 | Cobank Agricultural Credit Bank, (4) |
6.250% | N/A (3) | BBB+ | 5,114,674 | |||||||||||||||
| 4,960 | Commerzbank AG, 144A, (5) |
8.125% | 9/19/23 | BBB | 5,914,540 | |||||||||||||||
| 4,204 | HSBC Capital Funding LP, Debt, 144A |
10.176% | N/A (3) | BBB+ | 6,810,480 | |||||||||||||||
| 32,580 | JP Morgan Chase & Company |
6.750% | N/A (3) | BBB– | 36,408,150 | |||||||||||||||
| 125 | JP Morgan Chase & Company |
6.100% | N/A (3) | BBB– | 133,359 | |||||||||||||||
| 11,290 | JP Morgan Chase & Company |
5.300% | N/A (3) | BBB– | 11,631,523 | |||||||||||||||
| 10,575 | JP Morgan Chase & Company |
7.900% | N/A (3) | BBB– | 10,720,406 | |||||||||||||||
| 4,485 | KeyCorp Convertible Preferred Stock |
5.000% | N/A (3) | Baa3 | 4,563,488 | |||||||||||||||
| 22,925 | Lloyds Bank PLC, 144A, (4) |
12.000% | N/A (3) | BBB– | 30,597,700 | |||||||||||||||
| 6,520 | M&T Bank Corporation, (4) |
6.450% | N/A (3) | Baa2 | 7,359,450 | |||||||||||||||
| 5,715 | M&T Bank Corporation |
5.125% | N/A (3) | Baa2 | 5,999,321 | |||||||||||||||
| 3,655 | PNC Financial Services |
5.000% | N/A (3) | Baa2 | 3,832,268 | |||||||||||||||
| 26,603 | PNC Financial Services Inc., (4) |
6.750% | N/A (3) | Baa2 | 29,030,523 | |||||||||||||||
| 4,633 | Royal Bank of Scotland Group PLC |
7.648% | N/A (3) | Ba2 | 6,092,395 | |||||||||||||||
| 5,325 | SunTrust Bank Inc. |
5.625% | N/A (3) | Baa3 | 5,524,688 | |||||||||||||||
| 8,450 | SunTrust Bank Inc. |
5.050% | N/A (3) | Baa3 | 8,471,125 | |||||||||||||||
| 250 | US Bancorp, Convertible Bonds, Floating Rate |
5.125% | N/A (3) | A3 | 259,375 | |||||||||||||||
| 3,750 | Wachovia Capital Trust III |
5.570% | N/A (3) | Baa2 | 3,767,813 | |||||||||||||||
| 5,465 | Wells Fargo & Company |
7.980% | N/A (3) | Baa2 | 5,516,371 | |||||||||||||||
| 4,605 | Wells Fargo & Company |
5.900% | N/A (3) | Baa2 | 4,876,695 | |||||||||||||||
| 35,380 | Wells Fargo & Company, (4) |
5.875% | N/A (3) | Baa2 | 38,482,826 | |||||||||||||||
| 9,666 | Zions Bancorporation |
7.200% | N/A (3) | BB– | 10,825,920 | |||||||||||||||
| Total Banks |
365,542,247 | |||||||||||||||||||
| Capital Markets – 2.2% | ||||||||||||||||||||
| 2,320 | Bank of New York Mellon |
4.950% | N/A (3) | Baa1 | 2,372,780 | |||||||||||||||
| 11,375 | Goldman Sachs Group Inc. |
5.375% | N/A (3) | Ba1 | 11,744,687 | |||||||||||||||
| 2,945 | Goldman Sachs Group Inc. |
5.300% | N/A (3) | Ba1 | 3,066,481 | |||||||||||||||
| 5,140 | Morgan Stanley |
5.550% | N/A (3) | BB+ | 5,313,475 | |||||||||||||||
| 1,725 | State Street Corporation |
5.250% | N/A (3) | Baa1 | 1,798,313 | |||||||||||||||
| Total Capital Markets |
24,295,736 | |||||||||||||||||||
| Commercial Services & Supplies – 0.6% | ||||||||||||||||||||
| 6,430 | AerCap Global Aviation Trust, 144A, (5) |
6.500% | 6/15/45 | BB | 7,008,700 | |||||||||||||||
| Consumer Finance – 2.5% | ||||||||||||||||||||
| 4,396 | American Express Company |
5.200% | N/A (3) | Baa2 | 4,500,405 | |||||||||||||||
| 2,160 | American Express Company |
4.900% | N/A (3) | Baa2 | 2,192,400 | |||||||||||||||
| 28 | NUVEEN |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| Consumer Finance (continued) | ||||||||||||||||||||
| $ | 12,455 | Capital One Financial Corporation |
5.550% | N/A (3) | Baa3 | $ | 12,859,787 | |||||||||||||
| 7,920 | Discover Financial Services |
5.500% | N/A (3) | BB– | 8,043,751 | |||||||||||||||
| Total Consumer Finance |
27,596,343 | |||||||||||||||||||
| Diversified Financial Services – 3.2% | ||||||||||||||||||||
| 5,670 | BNP Paribas, 144A |
7.195% | N/A (3) | BBB | 6,555,938 | |||||||||||||||
| 14,800 | Compeer Financial ACA., 144A, (5) |
6.750% | N/A (3) | BB | 16,176,400 | |||||||||||||||
| 2,300 | Depository Trust & Clearing Corporation, 144A |
4.875% | N/A (3) | A | 2,369,000 | |||||||||||||||
| 7,443 | Rabobank Nederland, 144A |
11.000% | N/A (3) | Baa2 | 8,215,211 | |||||||||||||||
| 1,955 | Voya Financial Inc., (5) |
5.650% | 5/15/53 | Baa3 | 2,077,188 | |||||||||||||||
| Total Diversified Financial Services |
35,393,737 | |||||||||||||||||||
| Electric Utilities – 3.0% | ||||||||||||||||||||
| 3,620 | Electricite de France, 144A |
5.250% | N/A (3) | BBB | 3,719,550 | |||||||||||||||
| 25,485 | Emera, Inc., (4), (5) |
6.750% | 6/15/76 | BBB– | 28,798,050 | |||||||||||||||
| Total Electric Utilities |
32,517,600 | |||||||||||||||||||
| Energy Equipment & Services – 0.7% | ||||||||||||||||||||
| 7,571 | Transcanada Trust, (4), (5) |
5.875% | 8/15/76 | BBB | 8,244,819 | |||||||||||||||
| Equity Real Estate Investment Trusts – 1.3% | ||||||||||||||||||||
| 12 | Sovereign Real Estate Investment Trust, 144A |
12.000% | N/A (3) | Ba1 | 14,660,513 | |||||||||||||||
| Food Products – 4.5% | ||||||||||||||||||||
| 2,245 | Dairy Farmers of America Inc., 144A |
7.125% | N/A (3) | Baa3 | 2,475,113 | |||||||||||||||
| 6,490 | Land O’ Lakes Incorporated, 144A |
7.250% | N/A (3) | BB | 7,220,125 | |||||||||||||||
| 34,865 | Land O’ Lakes Incorporated, 144A |
8.000% | N/A (3) | BB | 39,571,774 | |||||||||||||||
| Total Food Products |
49,267,012 | |||||||||||||||||||
| Industrial Conglomerates – 3.6% | ||||||||||||||||||||
| 39,156 | General Electric Capital Corporation |
5.000% | N/A (3) | A– | 39,547,560 | |||||||||||||||
| Insurance – 10.6% | ||||||||||||||||||||
| 1,205 | AXA SA, (5) |
8.600% | 12/15/30 | A3 | 1,714,354 | |||||||||||||||
| 29,510 | Financial Security Assurance Holdings, 144A, (5) |
6.400% | 12/15/66 | BBB+ | 29,362,450 | |||||||||||||||
| 7,000 | Friends Life Group PLC, Reg S |
7.875% | N/A (3) | A– | 7,255,500 | |||||||||||||||
| 2,108 | La Mondiale SAM, Reg S |
7.625% | N/A (3) | BBB | 2,215,065 | |||||||||||||||
| 7,117 | Liberty Mutual Group, 144A, (4) |
7.800% | 3/15/37 | Baa3 | 9,003,005 | |||||||||||||||
| 9,335 | MetLife Capital Trust IV, 144A, (4) |
7.875% | 12/15/37 | BBB | 12,304,697 | |||||||||||||||
| 4,425 | MetLife Inc. |
5.250% | N/A (3) | BBB | 4,547,130 | |||||||||||||||
| 5,760 | MetLife Inc., 144A, (4), (5) |
9.250% | 4/08/38 | BBB | 8,460,000 | |||||||||||||||
| 1,150 | Nationwide Financial Services Capital Trust, (4), (5) |
7.899% | 3/01/37 | Baa2 | 1,273,794 | |||||||||||||||
| 9,550 | Nationwide Financial Services Inc., (4) |
6.750% | 5/15/37 | Baa2 | 10,696,000 | |||||||||||||||
| 900 | Principal Financial Group |
4.700% | 5/15/55 | Baa2 | 918,000 | |||||||||||||||
| 6,855 | Provident Financing Trust I, (5) |
7.405% | 3/15/38 | Baa3 | 7,832,523 | |||||||||||||||
| 3,315 | Prudential Financial Inc., (5) |
5.875% | 9/15/42 | BBB+ | 3,629,925 | |||||||||||||||
| 1,270 | Prudential Financial Inc., (5) |
5.625% | 6/15/43 | BBB+ | 1,381,379 | |||||||||||||||
| 2,540 | QBE Insurance Group Limited, Reg S |
6.750% | 12/02/44 | BBB | 2,858,770 | |||||||||||||||
| 11,875 | QBE Insurance Group Limited, 144A, (5) |
7.500% | 11/24/43 | Baa2 | 13,671,094 | |||||||||||||||
| Total Insurance |
117,123,686 | |||||||||||||||||||
| Machinery – 0.2% | ||||||||||||||||||||
| 2,215 | Stanley Black & Decker Inc., (5) |
5.750% | 12/15/53 | BBB+ | 2,281,450 | |||||||||||||||
| Media – 0.1% | ||||||||||||||||||||
| 1,285 | Viacom Inc., (5) |
5.875% | 2/28/57 | Ba1 | 1,305,133 | |||||||||||||||
| Metals & Mining – 0.5% | ||||||||||||||||||||
| 4,625 | BHP Billiton Finance USA Limited, 144A |
6.250% | 10/19/75 | A– | 4,966,094 | |||||||||||||||
| NUVEEN | 29 |
| JPC | Nuveen Preferred and Income Opportunities Fund | |||
| Portfolio of Investments (continued) | January 31, 2018 (Unaudited) |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| Oil, Gas & Consumable Fuels – 0.2% | ||||||||||||||||||||
| $ | 1,790 | Enterprise Products Operating LLP, (5) |
5.250% | 8/16/77 | Baa2 | $ | 1,785,525 | |||||||||||||
| U.S. Agency – 0.5% | ||||||||||||||||||||
| 4,700 | Farm Credit Bank of Texas, 144A, (5) |
10.000% | N/A (3) | Baa1 | 5,522,500 | |||||||||||||||
| Total $1,000 Par (or similar) Institutional Preferred (cost $709,657,950) |
|
755,442,317 | ||||||||||||||||||
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| $25 PAR (OR SIMILAR) RETAIL PREFERRED – 43.5% (29.1% of Total Investments) |
| |||||||||||||||||||
| Banks – 11.1% | ||||||||||||||||||||
| 134,000 | Cowen Group, Inc. |
7.350% | N/R | $ | 3,370,100 | |||||||||||||||
| 126,000 | AgriBank FCB, (6) |
6.875% | BBB+ | 13,812,750 | ||||||||||||||||
| 86,444 | Boston Private Financial Holdings Inc. |
6.950% | N/R | 2,220,746 | ||||||||||||||||
| 148,791 | Citigroup Inc. |
8.125% | BB+ | 3,791,195 | ||||||||||||||||
| 538,298 | Citigroup Inc., (5) |
7.125% | BB+ | 15,201,535 | ||||||||||||||||
| 172,975 | Cobank Agricultural Credit Bank, 144A, (6) |
6.250% | BBB+ | 18,378,594 | ||||||||||||||||
| 73,511 | Cobank Agricultural Credit Bank, (6) |
6.200% | BBB+ | 7,865,677 | ||||||||||||||||
| 38,725 | Cobank Agricultural Credit Bank, (6) |
6.125% | BBB+ | 3,882,181 | ||||||||||||||||
| 148,251 | Countrywide Capital Trust III |
7.000% | BBB– | 3,792,261 | ||||||||||||||||
| 218,164 | Fifth Third Bancorp., (5) |
6.625% | Baa3 | 6,169,678 | ||||||||||||||||
| 178,757 | FNB Corporation, (4) |
7.250% | Ba2 | 5,323,383 | ||||||||||||||||
| 138,932 | HSBC Holdings PLC, (5) |
8.000% | BBB+ | 3,698,370 | ||||||||||||||||
| 434,200 | Huntington BancShares Inc. |
6.250% | Baa3 | 11,601,824 | ||||||||||||||||
| 109,175 | KeyCorp Preferred Stock, (5) |
6.125% | Baa3 | 3,084,740 | ||||||||||||||||
| 82,000 | People’s United Financial, Inc., (5) |
5.625% | BB+ | 2,132,000 | ||||||||||||||||
| 363,549 | Regions Financial Corporation, (5) |
6.375% | BB+ | 9,993,962 | ||||||||||||||||
| 113,600 | U.S. Bancorp., (5) |
6.500% | A3 | 3,148,992 | ||||||||||||||||
| 140,652 | Western Alliance Bancorp., (4) |
6.250% | N/R | 3,607,724 | ||||||||||||||||
| 39,465 | Zions Bancorporation, (5) |
6.300% | BB– | 1,059,635 | ||||||||||||||||
| Total Banks |
122,135,347 | |||||||||||||||||||
| Capital Markets – 8.2% | ||||||||||||||||||||
| 159,589 | Apollo Investment Corporation, (4) |
6.875% | BBB– | 4,085,478 | ||||||||||||||||
| 170,450 | B. Riley Financial Inc. |
7.250% | N/R | 4,269,773 | ||||||||||||||||
| 142,980 | B. Riley Financial, Inc. |
7.500% | N/R | 3,610,245 | ||||||||||||||||
| 134,939 | Charles Schwab Corporation |
6.000% | BBB | 3,539,450 | ||||||||||||||||
| 129,169 | Charles Schwab Corporation, (4) |
5.950% | BBB | 3,398,436 | ||||||||||||||||
| 74,600 | Goldman Sachs Group, Inc. |
5.500% | Ba1 | 1,943,330 | ||||||||||||||||
| 116,034 | Hercules Technology Growth Capital Incorporated, (4) |
6.250% | BBB– | 2,941,462 | ||||||||||||||||
| 370,280 | Ladenburg Thalmann Financial Services Inc. |
8.000% | N/R | 9,386,598 | ||||||||||||||||
| 1,054,488 | Morgan Stanley, (4), (5) |
7.125% | BB+ | 30,000,183 | ||||||||||||||||
| 269,900 | Morgan Stanley, (5) |
6.875% | BB+ | 7,573,394 | ||||||||||||||||
| 221,100 | Morgan Stanley, (5) |
5.850% | BB+ | 5,781,765 | ||||||||||||||||
| 74,448 | Northern Trust Corporation, (5) |
5.850% | BBB+ | 1,955,004 | ||||||||||||||||
| 145,905 | Oaktree Specialty Lending Corporation, (4) |
6.125% | BB | 3,611,149 | ||||||||||||||||
| 51,445 | State Street Corporation, (5) |
5.350% | Baa1 | 1,353,004 | ||||||||||||||||
| 138,364 | Stifel Financial Corporation, (5) |
6.250% | BB– | 3,625,137 | ||||||||||||||||
| 111,601 | Triangle Capital Corporation, (4) |
6.375% | N/R | 2,801,185 | ||||||||||||||||
| Total Capital Markets |
89,875,593 | |||||||||||||||||||
| Consumer Finance – 3.3% | ||||||||||||||||||||
| 169,911 | Capital One Financial Corporation, (5) |
6.700% | Baa3 | 4,502,642 | ||||||||||||||||
| 1,219,645 | GMAC Capital Trust I, (4) |
5.785% | B+ | 31,735,163 | ||||||||||||||||
| Total Consumer Finance |
36,237,805 | |||||||||||||||||||
| Diversified Financial Services – 0.3% | ||||||||||||||||||||
| 141,562 | Main Street Capital Corporation, (5) |
6.125% | N/R | 3,738,652 | ||||||||||||||||
| 30 | NUVEEN |
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| Diversified Telecommunication Services – 1.0% | ||||||||||||||||||||
| 334,132 | Qwest Corporation, (4) |
7.000% | BBB– | $ | 7,264,030 | |||||||||||||||
| 197,715 | Qwest Corporation, (4) |
6.875% | BBB– | 4,244,941 | ||||||||||||||||
| Total Diversified Telecommunication Services |
11,508,971 | |||||||||||||||||||
| Equity Real Estate Investment Trusts – 0.4% | ||||||||||||||||||||
| 46,684 | Colony Northstar, Inc., (4) |
8.250% | N/R | 1,175,970 | ||||||||||||||||
| 147,988 | Senior Housing Properties Trust, (4), (5) |
5.625% | BBB– | 3,684,901 | ||||||||||||||||
| Total Equity Real Estate Investment Trusts |
4,860,871 | |||||||||||||||||||
| Food Products – 3.9% | ||||||||||||||||||||
| 365,568 | CHS Inc., (4), (5) |
7.875% | N/R | 10,517,391 | ||||||||||||||||
| 517,590 | CHS Inc., (5) |
7.100% | N/R | 13,995,634 | ||||||||||||||||
| 486,440 | CHS Inc., (5) |
6.750% | N/R | 12,822,559 | ||||||||||||||||
| 23,000 | Dairy Farmers of America Inc., 144A, (6) |
7.875% | Baa3 | 2,367,057 | ||||||||||||||||
| 24,500 | Dairy Farmers of America Inc., 144A, (6) |
7.875% | Baa3 | 2,804,103 | ||||||||||||||||
| Total Food Products |
42,506,744 | |||||||||||||||||||
| Insurance – 8.6% | ||||||||||||||||||||
| 23,337 | Allstate Corporation |
6.750% | BBB– | 600,694 | ||||||||||||||||
| 302,283 | Argo Group US Inc., (4) |
6.500% | BBB– | 7,653,806 | ||||||||||||||||
| 394,916 | Aspen Insurance Holdings Limited, (5) |
5.950% | BBB– | 10,315,206 | ||||||||||||||||
| 73,500 | Aspen Insurance Holdings Limited, (5) |
5.625% | BBB– | 1,814,715 | ||||||||||||||||
| 125,700 | Axis Capital Holdings Limited, (5) |
5.500% | BBB | 3,043,197 | ||||||||||||||||
| 56,900 | Delphi Financial Group, Inc., (5), (6) |
1.872% | BB+ | 1,322,925 | ||||||||||||||||
| 217,135 | Hartford Financial Services Group Inc., (4), (5) |
7.875% | BBB– | 6,305,600 | ||||||||||||||||
| 604,007 | Kemper Corporation, (4) |
7.375% | Ba1 | 15,553,180 | ||||||||||||||||
| 365,333 | Maiden Holdings Limited, (5) |
8.250% | N/R | 8,263,833 | ||||||||||||||||
| 315,441 | Maiden Holdings NA Limited, (4) |
7.750% | N/R | 6,942,857 | ||||||||||||||||
| 106,195 | National General Holding Company |
7.625% | N/R | 2,623,547 | ||||||||||||||||
| 76,400 | National General Holding Company, (5) |
7.500% | N/R | 1,834,364 | ||||||||||||||||
| 153,954 | National General Holding Company, (5) |
7.500% | N/R | 3,659,487 | ||||||||||||||||
| 104,443 | PartnerRe Limited, (4), (5) |
7.250% | Baa2 | 2,876,360 | ||||||||||||||||
| 199,596 | Reinsurance Group of America Inc., (4), (5) |
6.200% | BBB | 5,556,752 | ||||||||||||||||
| 411,700 | Reinsurance Group of America, Inc., (4), (5) |
5.750% | BBB | 11,074,730 | ||||||||||||||||
| 220,272 | Torchmark Corporation, (4), (5) |
6.125% | BBB+ | 5,731,477 | ||||||||||||||||
| Total Insurance |
95,172,730 | |||||||||||||||||||
| Mortgage Real Estate Investment Trusts – 0.9% | ||||||||||||||||||||
| 178,638 | Arbor Realty Trust Incorporated |
7.375% | N/R | 4,560,628 | ||||||||||||||||
| 96,986 | MFA Financial Inc., (5) |
8.000% | N/R | 2,510,968 | ||||||||||||||||
| 107,000 | Wells Fargo REIT, (5) |
6.375% | BBB | 2,755,250 | ||||||||||||||||
| Total Mortgage Real Estate Investment Trusts |
9,826,846 | |||||||||||||||||||
| Oil, Gas & Consumable Fuels – 0.9% | ||||||||||||||||||||
| 80,400 | Nustar Energy LP, (5) |
8.500% | B1 | 2,027,688 | ||||||||||||||||
| 50,000 | Nustar Energy LP |
7.625% | B1 | 1,181,500 | ||||||||||||||||
| 256,105 | Nustar Logistics Limited Partnership, (5) |
8.456% | B+ | 6,497,384 | ||||||||||||||||
| Total Oil, Gas & Consumable Fuels |
9,706,572 | |||||||||||||||||||
| Thrifts & Mortgage Finance – 1.5% | ||||||||||||||||||||
| 194,503 | Federal Agricultural Mortgage Corporation, (4), (5) |
6.875% | N/R | 5,280,756 | ||||||||||||||||
| 143,124 | Federal Agricultural Mortgage Corporation, (5) |
6.000% | N/R | 3,828,567 | ||||||||||||||||
| 279,100 | New York Community Bancorp Inc., (5) |
6.375% | Ba1 | 7,812,009 | ||||||||||||||||
| Total Thrifts & Mortgage Finance |
16,921,332 | |||||||||||||||||||
| U.S. Agency – 2.4% | ||||||||||||||||||||
| 246,300 | Farm Credit Bank of Texas, 144A, (6) |
6.750% | Baa1 | 26,785,125 | ||||||||||||||||
| NUVEEN | 31 |
| JPC | Nuveen Preferred and Income Opportunities Fund | |||
| Portfolio of Investments (continued) | January 31, 2018 (Unaudited) |
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| Wireless Telecommunication Services – 1.0% | ||||||||||||||||||||
| 415,473 | United States Cellular Corporation, (4) |
7.250% | Ba1 | $ | 10,424,218 | |||||||||||||||
| Total $25 Par (or similar) Retail Preferred (cost $464,845,098) |
|
479,700,806 | ||||||||||||||||||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| CONTINGENT CAPITAL SECURITIES – 24.2% (16.2% of Total Investments) (7) |
|
|||||||||||||||||||
| Banks – 19.9% | ||||||||||||||||||||
| $ | 2,820 | Australia and New Zealand Banking Group Limited of the |
6.750% | N/A (3) | Baa2 | $ | 3,176,025 | |||||||||||||
| 7,916 | Banco Bilbao Vizcaya Argentaria S.A |
6.125% | N/A (3) | Ba2 | 8,236,598 | |||||||||||||||
| 3,600 | Banco Bilbao Vizcaya Argentaria S.A, Reg S |
9.000% | N/A (3) | BB | 3,649,853 | |||||||||||||||
| 1,205 | Banco Mercantil del Norte, 144A |
7.625% | N/A (3) | BB | 1,335,441 | |||||||||||||||
| 1,200 | Banco Santander SA, Reg S |
6.375% | N/A (3) | Ba1 | 1,226,472 | |||||||||||||||
| 8,110 | Barclays PLC, Reg S |
7.875% | N/A (3) | BB+ | 8,866,176 | |||||||||||||||
| 14,135 | Barclays PLC |
8.250% | N/A (3) | BB+ | 14,718,633 | |||||||||||||||
| 12,535 | Credit Agricole SA, 144A |
8.125% | N/A (3) | BBB– | 15,007,103 | |||||||||||||||
| 9,585 | Credit Agricole SA, 144A |
7.875% | N/A (3) | BBB– | 10,885,224 | |||||||||||||||
| 1,750 | HSBC Holdings PLC |
6.000% | N/A (3) | BBB | 1,830,938 | |||||||||||||||
| 5,115 | HSBC Holdings PLC |
6.875% | N/A (3) | BBB | 5,492,231 | |||||||||||||||
| 5,055 | ING Groep N.V |
6.500% | N/A (3) | BBB– | 5,446,763 | |||||||||||||||
| 1,000 | ING Groep N.V, Reg S |
6.875% | N/A (3) | BBB– | 1,083,804 | |||||||||||||||
| 22,550 | Intesa Sanpaolo SpA, 144A |
7.700% | N/A (3) | BB– | 25,086,874 | |||||||||||||||
| 24,470 | Lloyds Banking Group PLC |
7.500% | N/A (3) | BB+ | 27,620,513 | |||||||||||||||
| 5,000 | Nordea Bank AB, 144A |
6.125% | N/A (3) | BBB | 5,365,250 | |||||||||||||||
| 8,405 | Royal Bank of Scotland Group PLC |
8.625% | N/A (3) | Ba3 | 9,382,081 | |||||||||||||||
| 1,500 | Royal Bank of Scotland Group PLC |
8.000% | N/A (3) | Ba3 | 1,716,570 | |||||||||||||||
| 11,105 | Royal Bank of Scotland Group PLC |
7.500% | N/A (3) | Ba3 | 11,757,419 | |||||||||||||||
| 9,846 | Societe Generale, 144A |
7.875% | N/A (3) | BB+ | 11,150,595 | |||||||||||||||
| 7,795 | Societe Generale, 144A |
7.375% | N/A (3) | BB+ | 8,408,856 | |||||||||||||||
| 6,485 | Standard Chartered PLC, 144A |
7.750% | N/A (3) | Ba1 | 7,133,500 | |||||||||||||||
| 2,660 | Standard Chartered PLC, 144A |
7.500% | N/A (3) | Ba1 | 2,866,150 | |||||||||||||||
| 2,600 | Standard Chartered PLC, 144A |
6.500% | N/A (3) | Ba1 | 2,678,380 | |||||||||||||||
| 22,575 | UniCredit SpA, Reg S |
8.000% | N/A (3) | B+ | 25,078,613 | |||||||||||||||
| 199,017 | Total Banks |
219,200,062 | ||||||||||||||||||
| Capital Markets – 3.3% | ||||||||||||||||||||
| 1,600 | Credit Suisse Group AG, Reg S |
7.125% | N/A (3) | Ba2 | 1,742,000 | |||||||||||||||
| 12,820 | Credit Suisse Group AG, 144A |
7.500% | N/A (3) | BB | 14,582,750 | |||||||||||||||
| 2,900 | Macquarie Bank Limited, 144A |
6.125% | N/A (3) | Ba1 | 3,008,750 | |||||||||||||||
| 4,355 | UBS Group AG, Reg S |
7.125% | N/A (3) | BBB– | 4,586,991 | |||||||||||||||
| 11,230 | UBS Group AG, Reg S |
7.000% | N/A (3) | BBB– | 12,689,900 | |||||||||||||||
| 32,905 | Total Capital Markets |
36,610,391 | ||||||||||||||||||
| Diversified Financial Services – 1.0% | ||||||||||||||||||||
| 6,065 | BNP Paribas, 144A |
7.375% | N/A (3) | BBB– | 6,967,169 | |||||||||||||||
| 3,170 | BNP Paribas, 144A |
7.625% | N/A (3) | BBB– | 3,459,263 | |||||||||||||||
| 9,235 | Total Diversified Financial Services |
10,426,432 | ||||||||||||||||||
| $ | 241,157 | Total Contingent Capital Securities (cost $253,643,559) |
|
266,236,885 | ||||||||||||||||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| CORPORATE BONDS – 10.0% (6.7% of Total Investments) |
| |||||||||||||||||||
| Automobiles – 0.3% | ||||||||||||||||||||
| $ | 2,825 | Ford Motor Company |
7.450% | 7/16/31 | BBB | $ | 3,590,586 | |||||||||||||
| 32 | NUVEEN |
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| Biotechnology – 0.3% | ||||||||||||||||||||
| $ | 3,500 | AMAG Pharmaceuticals Inc., 144A, (4) |
7.875% | 9/01/23 | Ba3 | $ | 3,325,000 | |||||||||||||
| Capital Markets – 0.4% | ||||||||||||||||||||
| 3,960 | Donnelley Financial Solutions, Inc., (4) |
8.250% | 10/15/24 | B | 4,187,700 | |||||||||||||||
| Chemicals – 0.5% | ||||||||||||||||||||
| 4,675 | CVR Partners LP / CVR Nitrogen Finance Corp., 144A, (4) |
9.250% | 6/15/23 | B+ | 4,996,406 | |||||||||||||||
| Commercial Services & Supplies – 0.6% | ||||||||||||||||||||
| 6,040 | GFL Environmental Corporation, 144A, (4) |
9.875% | 2/01/21 | B– | 6,364,650 | |||||||||||||||
| Consumer Finance – 0.7% | ||||||||||||||||||||
| 6,975 | Navient Corporation, (4) |
8.000% | 3/25/20 | BB | 7,539,626 | |||||||||||||||
| Diversified Telecommunication Services – 0.2% | ||||||||||||||||||||
| 2,300 | Frontier Communications Corporation, (4) |
11.000% | 9/15/25 | B+ | 1,799,750 | |||||||||||||||
| Equity Real Estate Investment Trusts – 0.7% | ||||||||||||||||||||
| 8,175 | Communications Sales & Leasing Inc., (4) |
8.250% | 10/15/23 | BB– | 7,745,813 | |||||||||||||||
| Food Products – 0.1% | ||||||||||||||||||||
| 1,310 | Land O Lakes Capital Trust I, 144A, (5) |
7.450% | 3/15/28 | Ba1 | 1,486,850 | |||||||||||||||
| Health Care Providers & Services – 0.7% | ||||||||||||||||||||
| 7,720 | Kindred Healthcare Inc., (4) |
8.000% | 1/15/20 | B– | 8,236,275 | |||||||||||||||
| Insurance – 0.2% | ||||||||||||||||||||
| 2,010 | Security Benefit Life Insurance Company, 144A, (5) |
7.450% | 10/01/33 | BBB | 2,436,737 | |||||||||||||||
| IT Services – 0.2% | ||||||||||||||||||||
| 2,350 | First Data Corporation, 144A |
7.000% | 12/01/23 | B | 2,474,856 | |||||||||||||||
| Media – 1.6% | ||||||||||||||||||||
| 10,425 | Dish DBS Corporation, (4) |
7.750% | 7/01/26 | Ba3 | 10,711,687 | |||||||||||||||
| 5,875 | Viacom Inc., (4) |
6.875% | 4/30/36 | BBB | 6,996,663 | |||||||||||||||
| 16,300 | Total Media |
17,708,350 | ||||||||||||||||||
| Oil, Gas & Consumable Fuels – 0.7% | ||||||||||||||||||||
| 7,200 | Enviva Parnters LP / Enviva Partners Finance Corp. |
8.500% | 11/01/21 | BB– | 7,695,000 | |||||||||||||||
| Software – 0.4% | ||||||||||||||||||||
| 4,175 | Conduent Finance Inc. / Xerox Business Services LLC, 144A, (4) |
10.500% | 12/15/24 | BB | 4,875,565 | |||||||||||||||
| Specialty Retail – 0.6% | ||||||||||||||||||||
| 6,450 | L Brands, Inc., (4) |
6.875% | 11/01/35 | BB+ | 6,595,125 | |||||||||||||||
| Technology Hardware, Storage & Peripherals – 1.5% | ||||||||||||||||||||
| 13,885 | Western Digital Corporation, (4) |
10.500% | 4/01/24 | Baa3 | 16,235,036 | |||||||||||||||
| Wireless Telecommunication Services – 0.3% | ||||||||||||||||||||
| 3,375 | Altice Financing SA, 144A, (4) |
7.500% | 5/15/26 | BB– | 3,503,689 | |||||||||||||||
| $ | 103,225 | Total Corporate Bonds (cost $109,831,291) |
110,797,014 | |||||||||||||||||
| NUVEEN | 33 |
| JPC | Nuveen Preferred and Income Opportunities Fund | |||
| Portfolio of Investments (continued) | January 31, 2018 (Unaudited) |
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| CONVERTIBLE PREFERRED SECURITIES – 1.1% (0.7% of Total Investments) |
| |||||||||||||||||||
| Electric Utilities – 1.1% | ||||||||||||||||||||
| 167,100 | NextEra Energy Inc., (4) |
6.371% | BBB | $ | 11,857,416 | |||||||||||||||
| Total Convertible Preferred Securities (cost $10,100,296) |
11,857,416 | |||||||||||||||||||
| Shares | Description (1) | Value | ||||||||||||||||||
| COMMON STOCKS – 0.3% (0.2% of Total Investments) |
||||||||||||||||||||
| Capital Markets – 0.3% | ||||||||||||||||||||
| 184,035 | Ares Capital Corporation, (5) |
$ | 2,935,358 | |||||||||||||||||
| Total Common Stocks (cost $3,036,662) |
2,935,358 | |||||||||||||||||||
| Total Long-Term Investments (cost $1,551,114,856) |
1,626,969,796 | |||||||||||||||||||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Value | ||||||||||||||||
| SHORT-TERM INVESTMENTS – 2.0% (1.3% of Total Investments) |
||||||||||||||||||||
| REPURCHASE AGREEMENTS – 2.0% (1.3% of Total Investments) |
||||||||||||||||||||
| $ | 21,717 | Repurchase Agreement with Fixed Income Clearing
Corporation, |
0.540% | 2/01/18 | $ | 21,717,039 | ||||||||||||||
| Total Short-Term Investments (cost $21,717,039) |
21,717,039 | |||||||||||||||||||
| Total Investments (cost $1,572,831,895) – 149.7% |
1,648,686,835 | |||||||||||||||||||
| Borrowings – (39.7)% (8), (9) |
(437,000,000 | ) | ||||||||||||||||||
| Reverse Repurchase Agreements – (11.4)% (10) |
(125,000,000 | ) | ||||||||||||||||||
| Other Assets Less Liabilities – 1.4% (11) |
14,541,215 | |||||||||||||||||||
| Net Assets Applicable to Common Shares – 100% |
$ | 1,101,228,050 | ||||||||||||||||||
Investments in Derivatives
Interest Rate Swaps – OTC Uncleared
| Counterparty | Notional Amount |
Fund Pay/Receive Floating Rate |
Floating Rate Index | Fixed Rate (Annualized) |
Fixed Rate Payment Frequency |
Effective Date (12) |
Optional Termination Date |
Maturity Date |
Value | Unrealized Appreciation (Depreciation) |
||||||||||||||||||||||||||||||
| Morgan Stanley Capital Services, LLC |
$ | 277,500,000 | Receive | 1-Month LIBOR | 1.994 | % | Monthly | 6/01/18 | 7/01/25 | 7/01/27 | $ | 9,697,121 | $ | 9,697,121 | ||||||||||||||||||||||||||
| Total unrealized appreciation on interest rate swaps |
|
$ | 9,697,121 | |||||||||||||||||||||||||||||||||||||
| 34 | NUVEEN |
For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.
| (1) | All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted. |
| (2) | For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies. |
| (3) | Perpetual security. Maturity date is not applicable. |
| (4) | Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in reverse repurchase agreements. As of the end of the reporting period, investments with a value of $291,700,080 have been pledged as collateral for reverse repurchase agreements. |
| (5) | Investment, or portion of investment, is hypothecated as described in the Notes to Financial Statements, Note 8 – Fund Leverage, Rehypothecation. The total value of investments hypothecated as of the end of the reporting period was $342,175,999. |
| (6) | For fair value measurement disclosure purposes, investment classified as Level 2. See Notes to Financial Statements, Note 2 – Investment Valuation and Fair Value Measurements for more information. |
| (7) | Contingent Capital Securities (“CoCos”) are hybrid securities with loss absorption characteristics built into the terms for the benefit of the issuer. For example the terms may specify an automatic write-down of principal or a mandatory conversion into the issuer’s common stock under certain adverse circumstances, such as the issuer’s capital ratio falling below a specified level. |
| (8) | The Fund may pledge up to 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives, when applicable) in the Portfolio of Investments as collateral for borrowings. As of the end of the reporting period, investments with a value of $1,076,388,657 have been pledged as collateral for borrowings. |
| (9) | Borrowings as a percentage of Total Investments is 26.5%. |
| (10) | Reverse Repurchase Agreements as a percentage of Total Investments is 7.6%. |
| (11) | Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter (“OTC”) derivatives as presented on the Statement of Assets and Liabilities, when applicable. The unrealized appreciation (depreciation) of OTC cleared and exchange-traded derivatives is recognized as part of the cash collateral at brokers and/or the receivable or payable for variation margin as presented on the Statement of Assets and Liabilities, when applicable. |
| (12) | Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each contract. |
| 144A | Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers. |
| Reg S | Regulation S allows U.S. companies to sell securities to persons or entities located outside of the United States without registering those securities with the Securities and Exchange Commission. Specifically, Regulation S provides a safe harbor from the registration requirements of the Securities Act for the offers and sales of securities by both foreign and domestic issuers that are made outside the United States. |
| LIBOR | London Inter-Bank Offered Rate |
| REIT | Real Estate Investment Trust |
See accompanying notes to financial statements.
| NUVEEN | 35 |
JPI
| Nuveen Preferred and Income Term Fund |
||
| Portfolio of Investments |
January 31, 2018 (Unaudited) |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| LONG-TERM INVESTMENTS – 136.7% (99.7% of Total Investments) |
| |||||||||||||||||||
| $1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 63.8% (46.5% of Total Investments) |
| |||||||||||||||||||
| Automobiles – 1.1% | ||||||||||||||||||||
| $ | 6,120 | General Motors Financial Company Inc. |
5.750% | N/A (3) | BB+ | $ | 6,318,900 | |||||||||||||
| Banks – 24.7% | ||||||||||||||||||||
| 5,720 | Bank of America Corporation |
6.500% | N/A (3) | BBB– | 6,399,250 | |||||||||||||||
| 5,675 | Bank of America Corporation |
6.300% | N/A (3) | BBB– | 6,356,000 | |||||||||||||||
| 3,366 | Bank of America Corporation |
8.000% | N/A (3) | BBB– | 3,411,205 | |||||||||||||||
| 870 | Bank of America Corporation |
8.125% | N/A (3) | BBB– | 887,400 | |||||||||||||||
| 4,000 | Barclays Bank PLC, 144A, (4) |
10.180% | 6/12/21 | A– | 4,826,788 | |||||||||||||||
| 9,315 | Citigroup Inc. |
6.125% | N/A (3) | BB+ | 9,849,681 | |||||||||||||||
| 510 | Citigroup Inc. |
5.950% | N/A (3) | BB+ | 532,313 | |||||||||||||||
| 10,935 | Citigroup Inc. |
5.875% | N/A (3) | BB+ | 11,317,724 | |||||||||||||||
| 4,540 | Citizens Financial Group Inc. |
5.500% | N/A (3) | BB+ | 4,663,488 | |||||||||||||||
| 4,265 | Commerzbank AG, 144A |
8.125% | 9/19/23 | BBB | 5,085,789 | |||||||||||||||
| 4,351 | HSBC Capital Funding LP, Debt, 144A |
10.176% | N/A (3) | BBB+ | 7,048,620 | |||||||||||||||
| 13,479 | JP Morgan Chase & Company |
6.750% | N/A (3) | BBB– | 15,062,782 | |||||||||||||||
| 12,425 | JP Morgan Chase & Company |
5.300% | N/A (3) | BBB– | 12,800,855 | |||||||||||||||
| 3,670 | KeyCorp Convertible Preferred Stock |
5.000% | N/A (3) | Baa3 | 3,734,225 | |||||||||||||||
| 3,000 | Lloyds Bank PLC, 144A |
12.000% | N/A (3) | BBB– | 4,004,061 | |||||||||||||||
| 1,340 | M&T Bank Corporation |
6.450% | N/A (3) | Baa2 | 1,512,525 | |||||||||||||||
| 5,010 | M&T Bank Corporation |
5.125% | N/A (3) | Baa2 | 5,259,248 | |||||||||||||||
| 3,895 | PNC Financial Services |
5.000% | N/A (3) | Baa2 | 4,083,908 | |||||||||||||||
| 4,855 | PNC Financial Services Inc. |
6.750% | N/A (3) | Baa2 | 5,298,019 | |||||||||||||||
| 4,201 | Royal Bank of Scotland Group PLC |
7.648% | N/A (3) | Ba2 | 5,524,315 | |||||||||||||||
| 4,980 | SunTrust Bank Inc. |
5.050% | N/A (3) | Baa3 | 4,992,450 | |||||||||||||||
| 270 | US Bancorp, Convertible Bonds, Floating Rate |
5.125% | N/A (3) | A3 | 280,125 | |||||||||||||||
| 3,010 | Wachovia Capital Trust III |
5.570% | N/A (3) | Baa2 | 3,024,298 | |||||||||||||||
| 4,478 | Wells Fargo & Company |
7.980% | N/A (3) | Baa2 | 4,519,589 | |||||||||||||||
| 4,131 | Wells Fargo & Company |
5.900% | N/A (3) | Baa2 | 4,374,729 | |||||||||||||||
| 9,465 | Wells Fargo & Company |
5.875% | N/A (3) | Baa2 | 10,295,080 | |||||||||||||||
| Total Banks |
145,144,467 | |||||||||||||||||||
| Capital Markets – 3.2% | ||||||||||||||||||||
| 2,100 | Bank of New York Mellon |
4.950% | N/A (3) | Baa1 | 2,147,775 | |||||||||||||||
| 9,440 | Goldman Sachs Group Inc. |
5.375% | N/A (3) | Ba1 | 9,746,800 | |||||||||||||||
| 3,775 | Goldman Sachs Group Inc. |
5.300% | N/A (3) | Ba1 | 3,930,719 | |||||||||||||||
| 1,300 | Morgan Stanley |
5.550% | N/A (3) | BB+ | 1,343,875 | |||||||||||||||
| 1,355 | State Street Corporation |
5.250% | N/A (3) | Baa1 | 1,412,588 | |||||||||||||||
| Total Capital Markets |
18,581,757 | |||||||||||||||||||
| Commercial Services & Supplies – 1.0% | ||||||||||||||||||||
| 5,495 | AerCap Global Aviation Trust, 144A |
6.500% | 6/15/45 | BB | 5,989,550 | |||||||||||||||
| Consumer Finance – 3.1% | ||||||||||||||||||||
| 3,635 | American Express Company |
5.200% | N/A (3) | Baa2 | 3,721,331 | |||||||||||||||
| 2,000 | American Express Company |
4.900% | N/A (3) | Baa2 | 2,030,000 | |||||||||||||||
| 7,600 | Capital One Financial Corporation |
5.550% | N/A (3) | Baa3 | 7,847,000 | |||||||||||||||
| 4,465 | Discover Financial Services |
5.500% | N/A (3) | BB– | 4,534,766 | |||||||||||||||
| Total Consumer Finance |
18,133,097 | |||||||||||||||||||
| Diversified Financial Services – 6.1% | ||||||||||||||||||||
| 5,875 | BNP Paribas, 144A |
7.195% | N/A (3) | BBB | 6,792,969 | |||||||||||||||
| 15,700 | Compeer Financial ACA., 144A |
6.750% | N/A (3) | BB | 17,160,100 | |||||||||||||||
| 2,500 | Depository Trust & Clearing Corporation, 144A |
4.875% | N/A (3) | A | 2,575,000 | |||||||||||||||
| 36 | NUVEEN |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| Diversified Financial Services (continued) | ||||||||||||||||||||
| $ | 6,333 | Rabobank Nederland, 144A |
11.000% | N/A (3) | Baa2 | $ | 6,989,496 | |||||||||||||
| 2,052 | Voya Financial Inc., (4) |
5.650% | 5/15/53 | Baa3 | 2,180,250 | |||||||||||||||
| Total Diversified Financial Services |
35,697,815 | |||||||||||||||||||
| Electric Utilities – 2.4% | ||||||||||||||||||||
| 2,370 | Electricite de France, 144A |
5.250% | N/A (3) | BBB | 2,435,175 | |||||||||||||||
| 10,525 | Emera, Inc., (4) |
6.750% | 6/15/76 | BBB– | 11,893,250 | |||||||||||||||
| Total Electric Utilities |
14,328,425 | |||||||||||||||||||
| Equity Real Estate Investment Trusts – 2.6% | ||||||||||||||||||||
| 12,298 | Sovereign Real Estate Investment Trust, 144A |
12.000% | N/A (3) | Ba1 | 15,403,245 | |||||||||||||||
| Food Products – 3.3% | ||||||||||||||||||||
| 2,360 | Dairy Farmers of America Inc., 144A |
7.125% | N/A (3) | Baa3 | 2,601,900 | |||||||||||||||
| 1,410 | Land O Lakes Capital Trust I, 144A, (4) |
7.450% | 3/15/28 | Ba1 | 1,600,350 | |||||||||||||||
| 3,120 | Land O’ Lakes Incorporated, 144A |
7.250% | N/A (3) | BB | 3,471,000 | |||||||||||||||
| 10,170 | Land O’ Lakes Incorporated, 144A |
8.000% | N/A (3) | BB | 11,542,950 | |||||||||||||||
| Total Food Products |
19,216,200 | |||||||||||||||||||
| Industrial Conglomerates – 3.4% | ||||||||||||||||||||
| 19,872 | General Electric Capital Corporation |
5.000% | N/A (3) | A– | 20,070,720 | |||||||||||||||
| Insurance – 11.6% | ||||||||||||||||||||
| 26,750 | Financial Security Assurance Holdings, 144A, (4) |
6.400% | 12/15/66 | BBB+ | 26,616,250 | |||||||||||||||
| 2,299 | La Mondiale SAM, Reg S |
7.625% | N/A (3) | BBB | 2,415,766 | |||||||||||||||
| 3,655 | MetLife Inc. |
5.250% | N/A (3) | BBB | 3,755,878 | |||||||||||||||
| 4,770 | MetLife Inc., 144A, (4) |
9.250% | 4/08/38 | BBB | 7,005,938 | |||||||||||||||
| 7,703 | Provident Financing Trust I, (4) |
7.405% | 3/15/38 | Baa3 | 8,801,448 | |||||||||||||||
| 3,325 | Prudential Financial Inc., (4) |
5.875% | 9/15/42 | BBB+ | 3,640,875 | |||||||||||||||
| 2,335 | QBE Insurance Group Limited, Reg S |
6.750% | 12/02/44 | BBB | 2,628,043 | |||||||||||||||
| 11,260 | QBE Insurance Group Limited, 144A, (4) |
7.500% | 11/24/43 | Baa2 | 12,963,074 | |||||||||||||||
| Total Insurance |
67,827,272 | |||||||||||||||||||
| Media – 0.3% | ||||||||||||||||||||
| 1,935 | Viacom Inc. |
5.875% | 2/28/57 | Ba1 | 1,965,317 | |||||||||||||||
| Metals & Mining – 0.8% | ||||||||||||||||||||
| 4,370 | BHP Billiton Finance USA Limited, 144A |
6.250% | 10/19/75 | A– | 4,692,288 | |||||||||||||||
| U.S. Agency – 0.2% | ||||||||||||||||||||
| 752 | Farm Credit Bank of Texas, 144A |
10.000% | N/A (3) | Baa1 | 883,600 | |||||||||||||||
| Total $1,000 Par (or similar) Institutional Preferred (cost $347,710,850) |
|
374,252,653 | ||||||||||||||||||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| CONTINGENT CAPITAL SECURITIES – 40.4% (29.5% of Total Investments) (5) |
|
|||||||||||||||||||
| Banks – 32.8% | ||||||||||||||||||||
| $ | 2,450 | Australia and New Zealand Banking Group Limited of the United Kingdom, 144A |
6.750% | N/A (3) | Baa2 | $ | 2,759,313 | |||||||||||||
| 6,959 | Banco Bilbao Vizcaya Argentaria S.A |
6.125% | N/A (3) | Ba2 | 7,240,631 | |||||||||||||||
| 2,600 | Banco Bilbao Vizcaya Argentaria S.A, Reg S |
9.000% | N/A (3) | BB | 2,636,005 | |||||||||||||||
| 1,110 | Banco Mercantil del Norte, 144A |
7.625% | N/A (3) | BB | 1,230,158 | |||||||||||||||
| 1,200 | Banco Santander SA, Reg S |
6.375% | N/A (3) | Ba1 | 1,226,472 | |||||||||||||||
| 6,145 | Barclays PLC, Reg S |
7.875% | N/A (3) | BB+ | 6,717,960 | |||||||||||||||
| 12,580 | Barclays PLC |
8.250% | N/A (3) | BB+ | 13,099,427 | |||||||||||||||
| 10,184 | Credit Agricole SA, 144A |
8.125% | N/A (3) | BBB– | 12,192,448 | |||||||||||||||
| 8,175 | Credit Agricole SA, 144A |
7.875% | N/A (3) | BBB– | 9,283,955 | |||||||||||||||
| NUVEEN | 37 |
| JPI | Nuveen Preferred and Income Term Fund | |||
| Portfolio of Investments (continued) | January 31, 2018 (Unaudited) |
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| Banks (continued) | ||||||||||||||||||||
| $ | 1,500 | HSBC Holdings PLC |
6.000% | N/A (3) | BBB | $ | 1,569,375 | |||||||||||||
| 3,790 | HSBC Holdings PLC |
6.875% | N/A (3) | BBB | 4,069,513 | |||||||||||||||
| 6,890 | ING Groep N.V |
6.500% | N/A (3) | BBB– | 7,423,975 | |||||||||||||||
| 1,000 | ING Groep N.V, Reg S |
6.875% | N/A (3) | BBB– | 1,083,804 | |||||||||||||||
| 20,000 | Intesa Sanpaolo SpA, 144A |
7.700% | N/A (3) | BB– | 22,250,000 | |||||||||||||||
| 22,460 | Lloyds Banking Group PLC |
7.500% | N/A (3) | BB+ | 25,351,725 | |||||||||||||||
| 4,390 | Nordea Bank AB, 144A |
6.125% | N/A (3) | BBB | 4,710,690 | |||||||||||||||
| 5,360 | Royal Bank of Scotland Group PLC |
8.625% | N/A (3) | Ba3 | 5,983,100 | |||||||||||||||
| 6,000 | Royal Bank of Scotland Group PLC |
8.000% | N/A (3) | Ba3 | 6,866,280 | |||||||||||||||
| 5,970 | Royal Bank of Scotland Group PLC |
7.500% | N/A (3) | Ba3 | 6,320,738 | |||||||||||||||
| 8,878 | Societe Generale, 144A |
7.875% | N/A (3) | BB+ | 10,054,334 | |||||||||||||||
| 7,215 | Societe Generale, 144A |
7.375% | N/A (3) | BB+ | 7,783,181 | |||||||||||||||
| 5,600 | Standard Chartered PLC, 144A |
7.750% | N/A (3) | Ba1 | 6,160,000 | |||||||||||||||
| 2,530 | Standard Chartered PLC, 144A |
7.500% | N/A (3) | Ba1 | 2,726,075 | |||||||||||||||
| 2,240 | Standard Chartered PLC, 144A |
6.500% | N/A (3) | Ba1 | 2,307,527 | |||||||||||||||
| 19,515 | UniCredit SpA, Reg S |
8.000% | N/A (3) | B+ | 21,679,253 | |||||||||||||||
| 174,741 | Total Banks |
192,725,939 | ||||||||||||||||||
| Capital Markets – 5.9% | ||||||||||||||||||||
| 1,400 | Credit Suisse Group AG, Reg S |
7.125% | N/A (3) | Ba2 | 1,524,250 | |||||||||||||||
| 11,007 | Credit Suisse Group AG, 144A |
7.500% | N/A (3) | BB | 12,520,462 | |||||||||||||||
| 4,500 | Macquarie Bank Limited, 144A |
6.125% | N/A (3) | Ba1 | 4,668,750 | |||||||||||||||
| 3,762 | UBS Group AG, Reg S |
7.125% | N/A (3) | BBB– | 3,962,402 | |||||||||||||||
| 10,635 | UBS Group AG, Reg S |
7.000% | N/A (3) | BBB– | 12,017,550 | |||||||||||||||
| 31,304 | Total Capital Markets |
34,693,414 | ||||||||||||||||||
| Diversified Financial Services – 1.7% | ||||||||||||||||||||
| 5,330 | BNP Paribas, 144A |
7.375% | N/A (3) | BBB– | 6,122,837 | |||||||||||||||
| 3,360 | BNP Paribas, 144A |
7.625% | N/A (3) | BBB– | 3,666,600 | |||||||||||||||
| 8,690 | Total Diversified Financial Services |
9,789,437 | ||||||||||||||||||
| $ | 214,735 | Total Contingent Capital Securities (cost $224,091,066) |
237,208,790 | |||||||||||||||||
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| $25 PAR (OR SIMILAR) RETAIL PREFERRED – 32.1% (23.4% of Total Investments) |
|
|||||||||||||||||||
| Banks – 9.4% | ||||||||||||||||||||
| 115,900 | AgriBank FCB, (6) |
6.875% | BBB+ | $ | 12,705,537 | |||||||||||||||
| 274,167 | Citigroup Inc., (4) |
7.125% | BB+ | 7,742,476 | ||||||||||||||||
| 155,800 | Cobank Agricultural Credit Bank, 144A, (6) |
6.250% | BBB+ | 16,553,750 | ||||||||||||||||
| 40,797 | Cobank Agricultural Credit Bank, (6) |
6.200% | BBB+ | 4,365,279 | ||||||||||||||||
| 107,726 | Fifth Third Bancorp., (4) |
6.625% | Baa3 | 3,046,491 | ||||||||||||||||
| 157,500 | Huntington BancShares Inc. |
6.250% | Baa3 | 4,208,400 | ||||||||||||||||
| 192,878 | Regions Financial Corporation, (4) |
6.375% | BB+ | 5,302,216 | ||||||||||||||||
| 41,069 | Zions Bancorporation, (4) |
6.300% | BB– | 1,102,703 | ||||||||||||||||
| Total Banks |
55,026,852 | |||||||||||||||||||
| Capital Markets – 4.4% | ||||||||||||||||||||
| 54,600 | Goldman Sachs Group, Inc. |
5.500% | Ba1 | 1,422,330 | ||||||||||||||||
| 342,100 | Morgan Stanley, (4) |
7.125% | BB+ | 9,732,745 | ||||||||||||||||
| 235,300 | Morgan Stanley, (4) |
6.875% | BB+ | 6,602,518 | ||||||||||||||||
| 191,400 | Morgan Stanley, (4) |
5.850% | BB+ | 5,005,110 | ||||||||||||||||
| 61,000 | Northern Trust Corporation, (4) |
5.850% | BBB+ | 1,601,860 | ||||||||||||||||
| 54,750 | State Street Corporation, (4) |
5.350% | Baa1 | 1,439,925 | ||||||||||||||||
| Total Capital Markets |
25,804,488 | |||||||||||||||||||
| Consumer Finance – 0.8% | ||||||||||||||||||||
| 185,926 | GMAC Capital Trust I |
5.785% | B+ | 4,837,795 | ||||||||||||||||
| 38 | NUVEEN |
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| Food Products – 3.1% | ||||||||||||||||||||
| 185,400 | CHS Inc., (4) |
7.875% | N/R | $ | 5,333,958 | |||||||||||||||
| 161,100 | CHS Inc., (4) |
7.100% | N/R | 4,356,144 | ||||||||||||||||
| 141,800 | CHS Inc., (4) |
6.750% | N/R | 3,737,848 | ||||||||||||||||
| 24,000 | Dairy Farmers of America Inc., 144A, (6) |
7.875% | Baa3 | 2,469,972 | ||||||||||||||||
| 20,500 | Dairy Farmers of America Inc., 144A, (6) |
7.875% | Baa3 | 2,346,291 | ||||||||||||||||
| Total Food Products |
18,244,213 | |||||||||||||||||||
| Insurance – 6.2% | ||||||||||||||||||||
| 324,957 | Aspen Insurance Holdings Limited, (4) |
5.950% | BBB– | 8,487,877 | ||||||||||||||||
| 62,000 | Aspen Insurance Holdings Limited, (4) |
5.625% | BBB– | 1,530,780 | ||||||||||||||||
| 108,900 | Axis Capital Holdings Limited, (4) |
5.500% | BBB | 2,636,469 | ||||||||||||||||
| 61,100 | Delphi Financial Group, Inc., (4), (6) |
1.872% | BB+ | 1,420,575 | ||||||||||||||||
| 318,825 | Kemper Corporation |
7.375% | Ba1 | 8,209,744 | ||||||||||||||||
| 163,333 | Maiden Holdings NA Limited |
7.750% | N/R | 3,594,959 | ||||||||||||||||
| 62,847 | Reinsurance Group of America Inc., (4) |
6.200% | BBB | 1,749,660 | ||||||||||||||||
| 239,900 | Reinsurance Group of America, Inc., (4) |
5.750% | BBB | 6,453,310 | ||||||||||||||||
| 74,800 | Torchmark Corporation, (4) |
6.125% | BBB+ | 1,946,296 | ||||||||||||||||
| Total Insurance |
36,029,670 | |||||||||||||||||||
| Mortgage Real Estate Investment Trusts – 0.5% | ||||||||||||||||||||
| 114,600 | Wells Fargo REIT, (4) |
6.375% | BBB | 2,950,950 | ||||||||||||||||
| Oil, Gas & Consumable Fuels – 1.3% | ||||||||||||||||||||
| 84,700 | Nustar Energy LP, (4) |
8.500% | B1 | 2,136,134 | ||||||||||||||||
| 219,800 | Nustar Logistics Limited Partnership, (4) |
8.456% | B+ | 5,576,326 | ||||||||||||||||
| Total Oil, Gas & Consumable Fuels |
7,712,460 | |||||||||||||||||||
| Thrifts & Mortgage Finance – 2.3% | ||||||||||||||||||||
| 103,274 | Federal Agricultural Mortgage Corporation, (4) |
6.875% | N/R | 2,803,889 | ||||||||||||||||
| 145,808 | Federal Agricultural Mortgage Corporation, (4) |
6.000% | N/R | 3,900,364 | ||||||||||||||||
| 240,100 | New York Community Bancorp Inc., (4) |
6.375% | Ba1 | 6,720,399 | ||||||||||||||||
| Total Thrifts & Mortgage Finance |
13,424,652 | |||||||||||||||||||
| U.S. Agency – 4.1% | ||||||||||||||||||||
| 222,100 | Farm Credit Bank of Texas, 144A, (6) |
6.750% | Baa1 | 24,153,375 | ||||||||||||||||
| Total $25 Par (or similar) Retail Preferred (cost $177,900,813) |
|
188,184,455 | ||||||||||||||||||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| CORPORATE BONDS – 0.4% (0.3% of Total Investments) |
| |||||||||||||||||||
| Insurance – 0.4% | ||||||||||||||||||||
| $ | 1,685 | Security Benefit Life Insurance Company, 144A |
7.450% | 10/01/33 | BBB | $ | 2,042,738 | |||||||||||||
| $ | 1,685 | Total Corporate Bonds (cost $1,992,307) |
2,042,738 | |||||||||||||||||
| Total Long-Term Investments (cost $751,695,036) |
801,688,636 | |||||||||||||||||||
| NUVEEN | 39 |
| JPI | Nuveen Preferred and Income Term Fund | |||
| Portfolio of Investments (continued) | January 31, 2018 (Unaudited) |
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Value | ||||||||||||||||
| SHORT-TERM INVESTMENTS – 0.4% (0.3% of Total Investments) |
| |||||||||||||||||||
| REPURCHASE AGREEMENTS – 0.4% (0.3% of Total Investments) |
| |||||||||||||||||||
| $ | 2,595 | Repurchase Agreement with Fixed Income Clearing
Corporation |
0.540% | 2/01/18 | $ | 2,594,925 | ||||||||||||||
| Total Short-Term Investments (cost $2,594,925) |
2,594,925 | |||||||||||||||||||
| Total Investments (cost $754,289,961) – 137.1% |
804,283,561 | |||||||||||||||||||
| Borrowings – (38.4)% (7), (8) |
(225,000,000 | ) | ||||||||||||||||||
| Other Assets Less Liabilities – 1.3% (9) |
7,393,187 | |||||||||||||||||||
| Net Assets Applicable to Common Shares – 100% |
$ | 586,676,748 | ||||||||||||||||||
Investments in Derivatives
Interest Rate Swaps – OTC Uncleared
| Counterparty | Notional Amount |
Fund Pay/Receive Floating Rate |
Floating Rate Index | Fixed Rate (Annualized) |
Fixed Rate Payment Frequency |
Effective Date (10) |
Optional Termination Date |
Maturity Date |
Value | Unrealized Appreciation (Depreciation) |
||||||||||||||||||||||||||||||
| Morgan Stanley Capital Services, LLC |
$ | 112,000,000 | Receive | 1-Month LIBOR | 1.928 | % | Monthly | 6/01/18 | 3/01/23 | 3/01/24 | $ | 2,883,388 | $ | 2,883,388 | ||||||||||||||||||||||||||
| Total unrealized appreciation on interest rate swaps |
|
$ | 2,883,388 | |||||||||||||||||||||||||||||||||||||
For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.
| (1) | All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted. |
| (2) | For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies. |
| (3) | Perpetual security. Maturity date is not applicable. |
| (4) | Investment, or portion of investment, is hypothecated as described in the Notes to Financial Statements, Note 8 – Fund Leverage, Rehypothecation. The total value of investments hypothecated as of the end of the reporting period was $180,742,473. |
| (5) | Contingent Capital Securities (“CoCos”) are hybrid securities with loss absorption characteristics built into the terms of the security for the benefit of the issuer. For example, the terms may specify an automatic write-down of principal or a mandatory conversion into the issuer’s common stock under certain adverse circumstances, such as the issuer’s capital ratio falling below a specified level. |
| (6) | For fair value measurement disclosure purposes, investment classified as Level 2. See Notes to Financial Statements, Note 2 – Investment Valuation and Fair Value Measurements for more information. |
| (7) | The Fund may pledge up to 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives, when applicable) in the Portfolio of Investments as collateral for borrowings. As of the end of the reporting period, investments with a value of $593,509,964 have been pledged as collateral for borrowings. |
| (8) | Borrowings as a percentage of Total Investments is 28.0%. |
| (9) | Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter (“OTC”) derivatives as presented on the Statement of Assets and Liabilities, when applicable. The unrealized appreciation (depreciation) of OTC-cleared and exchange-traded derivatives is recognized as part of cash collateral at brokers and/or the receivable or payable for variation margin as presented on the Statement of Assets and Liabilities, when applicable. |
| (10) | Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each contract. |
| 144A | Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers. |
| Reg S | Regulation S allows U.S. companies to sell securities to persons or entities located outside of the United States without registering those securities with the Securities and Exchange Commission. Specifically, Regulation S provides a safe harbor from the registration requirements of the Securities Act for the offers and sales of securities by both foreign and domestic issuers that are made outside the United States. |
| LIBOR | London Inter-Bank Offered Rate |
| REIT | Real Estate Investment Trust |
See accompanying notes to financial statements.
| 40 | NUVEEN |
JPS
| Nuveen Preferred and Income Securities Fund |
||
| Portfolio of Investments |
January 31, 2018 (Unaudited) |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| LONG-TERM INVESTMENTS – 144.0% (97.7% of Total Investments) |
| |||||||||||||||||||
| $1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 69.9% (47.4% of Total Investments) |
| |||||||||||||||||||
| Automobiles – 0.0% | ||||||||||||||||||||
| $ | 1,000 | General Motors Financial Company Inc. |
5.750% | N/A (3) | BB+ | $ | 1,032,500 | |||||||||||||
| Banks – 28.5% | ||||||||||||||||||||
| 14,300 | Bank of America Corporation |
6.500% | N/A (3) | BBB– | 15,998,124 | |||||||||||||||
| 12,800 | Bank of America Corporation |
6.300% | N/A (3) | BBB– | 14,336,000 | |||||||||||||||
| 12,300 | Bank of America Corporation |
6.100% | N/A (3) | BBB– | 13,268,625 | |||||||||||||||
| 20,394 |
Bank of America Corporation, (3-Month LIBOR reference rate + 3.630% spread), (6) |
8.000% | N/A (3) | BBB– | 20,667,891 | |||||||||||||||
| 3,600 | Bank One Capital III, (4) |
8.750% | 9/01/30 | Baa2 | 5,148,077 | |||||||||||||||
| 7,000 | Citigroup Inc. |
6.250% | N/A (3) | BB+ | 7,612,500 | |||||||||||||||
| 43,000 | Citigroup Inc., (4) |
6.125% | N/A (3) | BB+ | 45,468,200 | |||||||||||||||
| 9,250 | Citigroup Inc. |
5.950% | N/A (3) | BB+ | 9,724,063 | |||||||||||||||
| 10,000 | Citigroup Inc. |
8.400% | N/A (3) | BB+ | 10,175,000 | |||||||||||||||
| 24,389 | Citizens Financial Group Inc. |
5.500% | N/A (3) | BB+ | 25,052,381 | |||||||||||||||
| 18,000 | Cobank Agricultural Credit Bank |
6.250% | N/A (3) | BBB+ | 19,629,882 | |||||||||||||||
| 1,250 | Den Norske Bank |
1.750% | N/A (3) | Baa2 | 1,085,625 | |||||||||||||||
| 1,250 | Den Norske Bank |
1.573% | N/A (3) | Baa2 | 1,085,625 | |||||||||||||||
| 17,900 | Dresdner Funding Trust I, Reg S |
8.151% | 6/30/31 | BB+ | 24,030,750 | |||||||||||||||
| 4,500 | Dresdner Funding Trust, 144A |
8.151% | 6/30/31 | BB+ | 6,041,250 | |||||||||||||||
| 25,580 | First Union Capital Trust II, Series A, (4), (5) |
7.950% | 11/15/29 | Baa1 | 33,427,875 | |||||||||||||||
| 30,000 | HSBC Capital Funding LP, Debt, 144A |
10.176% | N/A (3) | BBB+ | 48,600,000 | |||||||||||||||
| 54,000 | JP Morgan Chase & Company |
6.750% | N/A (3) | BBB– | 60,345,000 | |||||||||||||||
| 10,000 | JP Morgan Chase & Company |
6.100% | N/A (3) | BBB– | 10,668,750 | |||||||||||||||
| 11,000 | JP Morgan Chase & Company |
6.000% | N/A (3) | BBB– | 11,687,500 | |||||||||||||||
| 4,900 | JP Morgan Chase & Company |
5.300% | N/A (3) | BBB– | 5,048,225 | |||||||||||||||
| 3,500 | JP Morgan Chase & Company |
5.150% | N/A (3) | BBB– | 3,565,625 | |||||||||||||||
| 27,300 | JP Morgan Chase & Company |
7.900% | N/A (3) | BBB– | 27,675,374 | |||||||||||||||
| 8,000 | KeyCorp Capital III, (5) |
7.750% | 7/15/29 | Baa2 | 10,400,000 | |||||||||||||||
| 12,000 | Lloyds Bank PLC, 144A, (4) |
12.000% | N/A (3) | BBB– | 16,016,244 | |||||||||||||||
| 20,900 | Lloyds Bank PLC, Reg S |
12.000% | N/A (3) | BBB– | 27,907,373 | |||||||||||||||
| 4,800 | Lloyds Banking Group PLC, 144A |
6.413% | N/A (3) | Baa3 | 5,646,000 | |||||||||||||||
| 9,850 | Lloyds Banking Group PLC, 144A |
6.657% | N/A (3) | Baa3 | 11,721,500 | |||||||||||||||
| 9,100 | M&T Bank Corporation, (4) |
6.375% | N/A (3) | Baa1 | 9,282,000 | |||||||||||||||
| 29,100 | PNC Financial Services Inc. |
6.750% | N/A (3) | Baa2 | 31,755,375 | |||||||||||||||
| 25,000 | Standard Chartered PLC, 144A |
7.014% | N/A (3) | Ba1 | 30,700,000 | |||||||||||||||
| 31,278 | Wells Fargo & Company |
7.980% | N/A (3) | Baa2 | 31,572,013 | |||||||||||||||
| 3,000 | Wells Fargo & Company |
5.875% | N/A (3) | Baa2 | 3,263,100 | |||||||||||||||
| Total Banks |
598,605,947 | |||||||||||||||||||
| Capital Markets – 2.1% | ||||||||||||||||||||
| 12,100 | Bank of New York Mellon |
4.950% | N/A (3) | Baa1 | 12,375,275 | |||||||||||||||
| 18,700 | Charles Schwab Corporation |
7.000% | N/A (3) | BBB | 21,037,500 | |||||||||||||||
| 3,500 | Goldman Sachs Group Inc. |
5.700% | N/A (3) | Ba1 | 3,602,830 | |||||||||||||||
| 6,150 | Morgan Stanley |
5.550% | N/A (3) | BB+ | 6,357,563 | |||||||||||||||
| Total Capital Markets |
43,373,168 | |||||||||||||||||||
| Consumer Finance – 0.4% | ||||||||||||||||||||
| 8,000 | Capital One Financial Corporation |
5.550% | N/A (3) | Baa3 | 8,260,000 | |||||||||||||||
| Diversified Financial Services – 2.5% | ||||||||||||||||||||
| 10,000 | Cooperatieve Rabobank U.A. of Netherlands, Reg S |
11.000% | N/A (3) | Baa2 | 11,037,500 | |||||||||||||||
| 2,861 | Countrywide Capital Trust III, Series B, (5) |
8.050% | 6/15/27 | BBB– | 3,608,722 | |||||||||||||||
| 17,557 | Rabobank Nederland, 144A |
11.000% | N/A (3) | Baa2 | 19,378,539 | |||||||||||||||
| 17,705 | Voya Financial Inc., (4), (5) |
5.650% | 5/15/53 | Baa3 | 18,811,563 | |||||||||||||||
| Total Diversified Financial Services |
52,836,324 | |||||||||||||||||||
| NUVEEN | 41 |
| JPS | Nuveen Preferred and Income Securities Fund | |||
| Portfolio of Investments (continued) | January 31, 2018 (Unaudited) |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| Electric Utilities – 3.0% | ||||||||||||||||||||
| $ | 22,600 | Emera, Inc., (4), (5) |
6.750% | 6/15/76 | BBB– | $ | 25,538,000 | |||||||||||||
| 1,000 | FPL Group Capital Inc., (3-Month LIBOR reference rate + 2.068% spread), (4), (6) |
3.762% | 10/01/66 | BBB | 963,750 | |||||||||||||||
| 11,450 | FPL Group Capital Inc., (3-Month LIBOR reference rate + 2.125% spread), (5), (6) |
3.738% | 6/15/67 | BBB | 10,964,840 | |||||||||||||||
| 1,600 | NextEra Energy Inc., (5) |
4.800% | 12/01/77 | BBB | 1,602,000 | |||||||||||||||
| 23,482 | PPL Capital Funding Inc., (3-Month LIBOR reference rate + 2.665% spread), (4), (6) |
1.721% | 3/30/67 | BBB | 23,247,180 | |||||||||||||||
| Total Electric Utilities |
62,315,770 | |||||||||||||||||||
| Energy Equipment & Services – 0.8% | ||||||||||||||||||||
| 14,530 | Transcanada Trust, (4) |
5.875% | 8/15/76 | BBB | 15,823,170 | |||||||||||||||
| Food Products – 0.2% | ||||||||||||||||||||
| 4,500 | Dairy Farmers of America Inc., 144A, (4) |
7.125% | N/A (3) | Baa3 | 4,961,250 | |||||||||||||||
| Industrial Conglomerates – 2.5% | ||||||||||||||||||||
| 51,061 | General Electric Capital Corporation |
5.000% | N/A (3) | A– | 51,571,610 | |||||||||||||||
| Insurance – 22.5% | ||||||||||||||||||||
| 3,598 | Ace Capital Trust II, (5) |
9.700% | 4/01/30 | BBB+ | 5,432,980 | |||||||||||||||
| 9,800 | AIG Life Holdings Inc., (4) |
8.500% | 7/01/30 | Baa2 | 13,034,000 | |||||||||||||||
| 4,400 | Allstate Corporation, (4) |
5.750% | 8/15/53 | Baa1 | 4,785,000 | |||||||||||||||
| 1,200 | Allstate Corporation, (5) |
6.500% | 5/15/57 | Baa1 | 1,452,000 | |||||||||||||||
| 13,605 | American International Group, Inc., (4) |
8.175% | 5/15/58 | Baa2 | 18,502,800 | |||||||||||||||
| 2,299 | AON Corporation, (4) |
8.205% | 1/01/27 | BBB | 2,988,700 | |||||||||||||||
| 900 | AXA, Reg S |
5.500% | N/A (3) | A3 | 916,938 | |||||||||||||||
| 16,550 | AXA SA, (4) |
8.600% | 12/15/30 | A3 | 23,545,685 | |||||||||||||||
| 17,819 | AXA SA, 144A |
6.380% | N/A (3) | Baa1 | 20,759,135 | |||||||||||||||
| 32,854 | Catlin Insurance Company Limited, 144A, (3-Month LIBOR reference rate + 2.975% spread), (6) |
4.719% | N/A (3) | BBB+ | 32,196,920 | |||||||||||||||
| 1,200 | Everest Reinsurance Holdings, Inc., (3-Month LIBOR reference rate + 2.385% spread), (4), (6) |
6.600% | 5/15/37 | BBB | 1,164,000 | |||||||||||||||
| 8,100 | Great West Life & Annuity Capital I, 144A, (5) |
6.625% | 11/15/34 | A– | 9,653,302 | |||||||||||||||
| 12,250 | Great West Life & Annuity Insurance Capital LP II,
144A, |
7.153% | 5/16/46 | A– | 12,096,875 | |||||||||||||||
| 11,688 | Hartford Financial Services Group Inc., (5) |
8.125% | 6/15/38 | BBB– | 11,907,150 | |||||||||||||||
| 16,150 | Hartford Financial Services Group, Inc., 144A, (3-Month LIBOR reference rate + 2.125% spread), (4), (6) |
3.547% | 2/12/47 | BBB– | 15,785,010 | |||||||||||||||
| 5,500 | Legal & General Group PLC, Reg S |
5.250% | 3/21/47 | BBB+ | 5,713,675 | |||||||||||||||
| 20,369 | Liberty Mutual Group, 144A, (3-Month LIBOR reference rate + 2.905% spread), (6) |
4.518% | 3/15/37 | Baa3 | 20,012,543 | |||||||||||||||
| 25,841 | Liberty Mutual Group, 144A, (4) |
7.800% | 3/15/37 | Baa3 | 32,688,864 | |||||||||||||||
| 3,277 | Lincoln National Corporation, (3-Month LIBOR reference rate + 2.358% spread), (4), (6) |
7.000% | 5/17/66 | BBB | 3,150,016 | |||||||||||||||
| 10,390 | Lincoln National Corporation, (3-Month LIBOR reference rate + 2.040% spread), (4), (6) |
6.050% | 4/20/67 | BBB | 9,662,700 | |||||||||||||||
| 26,100 | MetLife Capital Trust IV, 144A, (5) |
7.875% | 12/15/37 | BBB | 34,403,063 | |||||||||||||||
| 3,000 | MetLife Inc., (4) |
10.750% | 8/01/39 | BBB | 4,980,000 | |||||||||||||||
| 36,531 | MetLife Inc., 144A, (5) |
9.250% | 4/08/38 | BBB | 53,654,906 | |||||||||||||||
| 41,904 | Nationwide Financial Services Inc., (5) |
6.750% | 5/15/37 | Baa2 | 46,932,480 | |||||||||||||||
| 6,243 | Oil Insurance Limited, 144A, (3-Month LIBOR reference rate + 2.982% spread), (6) |
4.677% | N/A (3) | Baa1 | 6,040,103 | |||||||||||||||
| 10,750 | Provident Financing Trust I, (4), (5) |
7.405% | 3/15/38 | Baa3 | 12,282,950 | |||||||||||||||
| 6,225 | Prudential Financial Inc., (4) |
5.875% | 9/15/42 | BBB+ | 6,816,375 | |||||||||||||||
| 27,180 | Prudential Financial Inc., (4) |
5.625% | 6/15/43 | BBB+ | 29,563,685 | |||||||||||||||
| 305 | Prudential Financial Inc., (4) |
8.875% | 6/15/38 | BBB+ | 311,789 | |||||||||||||||
| 1,300 | Prudential PLC, Reg S |
7.750% | N/A (3) | A– | 1,328,760 | |||||||||||||||
| 5,405 | XL Capital Ltd, (3-Month LIBOR reference rate + 2.458% spread), (6) |
4.179% | N/A (3) | BBB | 5,073,944 | |||||||||||||||
| 28,700 | XLIT Limited |
3.687% | N/A (3) | BBB– | 26,691,000 | |||||||||||||||
| Total Insurance |
473,527,348 | |||||||||||||||||||
| 42 | NUVEEN |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| Machinery – 0.3% | ||||||||||||||||||||
| $ | 6,000 | Stanley Black & Decker Inc., (4) |
5.750% | 12/15/53 | BBB+ | $ | 6,180,000 | |||||||||||||
| Metals & Mining – 0.7% | ||||||||||||||||||||
| 13,000 | BHP Billiton Finance USA Limited, 144A, (4) |
6.750% | 10/19/75 | A– | 15,138,500 | |||||||||||||||
| Multi-Utilities – 0.1% | ||||||||||||||||||||
| 3,000 | WEC Energy Group, Inc., (3-Month LIBOR reference rate + 2.113% spread), (4), (6) |
3.528% | 5/15/67 | Baa1 | 2,909,010 | |||||||||||||||
| Oil, Gas & Consumable Fuels – 1.7% | ||||||||||||||||||||
| 3,000 | Enterprise Products Operating LLP, (4) |
5.250% | 8/16/77 | Baa2 | 2,992,500 | |||||||||||||||
| 32,624 | Enterprise Products Operating LP, (3-Month LIBOR reference rate + 2.680% spread), (4), (5), (6) |
1.748% | 1/15/68 | Baa2 | 32,827,900 | |||||||||||||||
| Total Oil, Gas & Consumable Fuels |
35,820,400 | |||||||||||||||||||
| Road & Rail – 1.4% | ||||||||||||||||||||
| 25,485 | Burlington Northern Santa Fe Funding Trust I, (5) |
6.613% | 12/15/55 | A– | 29,371,463 | |||||||||||||||
| Wireless Telecommunication Services – 3.2% | ||||||||||||||||||||
| 58,738 | Centaur Funding Corporation, Series B, 144A, (4) |
9.080% | 4/21/20 | BBB– | 67,221,130 | |||||||||||||||
| Total $1,000 Par (or similar) Institutional Preferred (cost $1,332,563,249) |
|
1,468,947,590 | ||||||||||||||||||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| CONTINGENT CAPITAL SECURITIES – 55.8% (37.8% of Total Investments) (7) |
| |||||||||||||||||||
| Banks – 41.0% | ||||||||||||||||||||
| $ | 27,800 | Australia and New Zealand Banking Group Limited of the |
6.750% | N/A (3) | Baa2 | $ | 31,309,750 | |||||||||||||
| 47,000 | Banco Bilbao Vizcaya Argentaria S.A, Reg S |
9.000% | N/A (3) | BB | 47,650,856 | |||||||||||||||
| 22,600 | Banco Santander SA, Reg S |
6.375% | N/A (3) | Ba1 | 23,098,556 | |||||||||||||||
| 26,400 | Barclays Bank PLC |
7.750% | 4/10/23 | BBB– | 26,571,600 | |||||||||||||||
| 7,000 | Barclays Bank PLC, (4) |
7.625% | 11/21/22 | BBB– | 7,927,570 | |||||||||||||||
| 36,416 | Barclays PLC |
7.434% | N/A (3) | BB+ | 37,402,509 | |||||||||||||||
| 45,290 | Barclays PLC |
8.250% | N/A (3) | BB+ | 47,160,024 | |||||||||||||||
| 50,400 | Credit Agricole SA, 144A |
8.125% | N/A (3) | BBB– | 60,339,685 | |||||||||||||||
| 19,653 | Credit Agricole SA, 144A |
7.875% | N/A (3) | BBB– | 22,318,969 | |||||||||||||||
| 6,500 | Credit Agricole SA, Reg S |
8.125% | N/A (3) | BBB– | 7,781,904 | |||||||||||||||
| 1,000 | Credit Agricole, S.A, 144A |
6.625% | N/A (3) | BBB– | 1,035,688 | |||||||||||||||
| 17,200 | DNB Bank ASA, Reg S |
6.500% | N/A (3) | BBB | 18,368,224 | |||||||||||||||
| 11,000 | DNB Bank ASA, Reg S |
5.750% | N/A (3) | BBB | 11,316,250 | |||||||||||||||
| 4,000 | HSBC Holdings PLC |
6.000% | N/A (3) | BBB | 4,185,000 | |||||||||||||||
| 66,505 | HSBC Holdings PLC |
6.875% | N/A (3) | BBB | 71,409,744 | |||||||||||||||
| 16,000 | ING Groep N.V |
6.500% | N/A (3) | BBB– | 17,240,000 | |||||||||||||||
| 5,000 | ING Groep N.V, Reg S |
6.875% | N/A (3) | BBB– | 5,419,020 | |||||||||||||||
| 70,529 | Lloyds Banking Group PLC |
7.500% | N/A (3) | BB+ | 79,609,609 | |||||||||||||||
| 12,330 | Nordea Bank AB, Reg S |
5.250% | N/A (3) | BBB | 12,580,620 | |||||||||||||||
| 35,090 | Nordea Bank AB, 144A |
6.125% | N/A (3) | BBB | 37,653,325 | |||||||||||||||
| 5,000 | Nordea Bank AB, Reg S |
6.125% | N/A (3) | BBB | 5,365,250 | |||||||||||||||
| 2,000 | Royal Bank of Scotland Group PLC |
8.625% | N/A (3) | Ba3 | 2,232,500 | |||||||||||||||
| 25,375 | Royal Bank of Scotland Group PLC |
8.000% | N/A (3) | Ba3 | 29,038,643 | |||||||||||||||
| 63,786 | Royal Bank of Scotland Group PLC |
7.500% | N/A (3) | Ba3 | 67,533,427 | |||||||||||||||
| 15,000 | Societe Generale, Reg S |
8.250% | N/A (3) | BB+ | 15,612,240 | |||||||||||||||
| 69,300 | Societe Generale, 144A |
8.000% | N/A (3) | BB+ | 80,994,375 | |||||||||||||||
| 9,000 | Societe Generale, Reg S |
7.875% | N/A (3) | BB+ | 10,192,500 | |||||||||||||||
| 13,000 | Standard Chartered PLC, 144A |
7.750% | N/A (3) | Ba1 | 14,300,000 | |||||||||||||||
| 12,000 | Standard Chartered PLC, 144A |
7.500% | N/A (3) | Ba1 | 12,930,000 | |||||||||||||||
| 4,000 | Standard Chartered PLC, Reg S |
7.500% | N/A (3) | Ba1 | 4,310,000 | |||||||||||||||
| 32,786 | Svenska Handelsbanken AB, Reg S |
5.250% | N/A (3) | BBB+ | 33,397,459 | |||||||||||||||
| 15,000 | Swedbank AB, Reg S |
6.000% | N/A (3) | BBB | 15,787,500 | |||||||||||||||
| 793,960 | Total Banks |
862,072,797 | ||||||||||||||||||
| NUVEEN | 43 |
| JPS | Nuveen Preferred and Income Securities Fund | |||
| Portfolio of Investments (continued) | January 31, 2018 (Unaudited) |
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| Capital Markets – 10.3% | ||||||||||||||||||||
| $ | 51,300 | Credit Suisse Group AG, 144A |
7.500% | N/A (3) | BB | $ | 58,353,750 | |||||||||||||
| 8,200 | Credit Suisse Group AG, 144A |
6.250% | N/A (3) | BB | 8,845,750 | |||||||||||||||
| 22,000 | Credit Suisse Group AG, Reg S |
7.500% | N/A (3) | BB | 25,025,000 | |||||||||||||||
| 11,000 | Credit Suisse Group AG, Reg S |
6.500% | 8/08/23 | BBB | 12,292,500 | |||||||||||||||
| 2,676 | UBS AG Stamford, (4) |
7.625% | 8/17/22 | A– | 3,118,878 | |||||||||||||||
| 11,700 | UBS Group AG, Reg S |
6.875% | N/A (3) | BBB– | 12,476,880 | |||||||||||||||
| 42,178 | UBS Group AG, Reg S |
7.125% | N/A (3) | BBB– | 44,424,822 | |||||||||||||||
| 5,609 | UBS Group AG, Reg S |
7.000% | N/A (3) | BBB– | 6,338,170 | |||||||||||||||
| 39,800 | UBS Group AG, Reg S |
6.875% | N/A (3) | BBB– | 44,260,665 | |||||||||||||||
| 194,463 | Total Capital Markets |
215,136,415 | ||||||||||||||||||
| Diversified Financial Services – 4.5% | ||||||||||||||||||||
| 5,000 | BNP Paribas, Reg S |
7.375% | N/A (3) | BBB– | 5,743,750 | |||||||||||||||
| 34,185 | BNP Paribas, 144A |
7.375% | N/A (3) | BBB– | 39,270,019 | |||||||||||||||
| 46,000 | BNP Paribas, 144A |
7.625% | N/A (3) | BBB– | 50,197,500 | |||||||||||||||
| 85,185 | Total Diversified Financial Services |
95,211,269 | ||||||||||||||||||
| $ | 1,073,608 | Total Contingent Capital Securities (cost $1,087,143,188) |
|
1,172,420,481 | ||||||||||||||||
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| $25 PAR (OR SIMILAR) RETAIL PREFERRED – 15.6% (10.6% of Total Investments) |
|
|||||||||||||||||||
| Banks – 6.4% | ||||||||||||||||||||
| 105,300 | AgriBank FCB, (8) |
6.875% | BBB+ | $ | 11,543,513 | |||||||||||||||
| 645,113 | Citigroup Inc. |
6.875% | BB+ | 18,192,186 | ||||||||||||||||
| 47,500 | Cobank Agricultural Credit Bank, 144A, (8) |
6.250% | BBB+ | 5,046,875 | ||||||||||||||||
| 53,000 | Cobank Agricultural Credit Bank, (8) |
6.200% | BBB+ | 5,671,000 | ||||||||||||||||
| 86,000 | Fifth Third Bancorp., (5) |
6.625% | Baa3 | 2,432,080 | ||||||||||||||||
| 724,000 | KeyCorp Preferred Stock, (5) |
6.125% | Baa3 | 20,456,620 | ||||||||||||||||
| 2,164,700 | PNC Financial Services, (5) |
6.125% | Baa2 | 59,897,248 | ||||||||||||||||
| 249,285 | Wells Fargo & Company, (5) |
5.850% | Baa2 | 6,606,053 | ||||||||||||||||
| 182,000 | Wells Fargo & Company |
5.625% | Baa2 | 4,570,020 | ||||||||||||||||
| Total Banks |
134,415,595 | |||||||||||||||||||
| Capital Markets – 1.4% | ||||||||||||||||||||
| 369,239 | Goldman Sachs Group, Inc. |
5.500% | Ba1 | 9,618,676 | ||||||||||||||||
| 38,534 | Morgan Stanley, (5) |
7.125% | BB+ | 1,096,292 | ||||||||||||||||
| 640,000 | Morgan Stanley, (5) |
5.850% | BB+ | 16,736,000 | ||||||||||||||||
| 74,642 | State Street Corporation, (5) |
5.900% | Baa1 | 1,996,674 | ||||||||||||||||
| Total Capital Markets |
29,447,642 | |||||||||||||||||||
| Diversified Telecommunication Services – 1.1% | ||||||||||||||||||||
| 55,291 | Qwest Corporation, (4) |
7.500% | BBB– | 1,352,418 | ||||||||||||||||
| 482,809 | Qwest Corporation |
7.000% | BBB– | 10,496,268 | ||||||||||||||||
| 122,448 | Qwest Corporation, (5) |
7.000% | BBB– | 2,654,673 | ||||||||||||||||
| 128,444 | Qwest Corporation, (5) |
6.875% | BBB– | 2,757,693 | ||||||||||||||||
| 99,763 | Qwest Corporation |
6.625% | BBB– | 2,062,101 | ||||||||||||||||
| 171,974 | Qwest Corporation |
6.125% | BBB– | 3,320,818 | ||||||||||||||||
| Total Diversified Telecommunication Services |
22,643,971 | |||||||||||||||||||
| Electric Utilities – 1.1% | ||||||||||||||||||||
| 160,000 | Alabama Power Company, (5) |
5.000% | A3 | 4,006,400 | ||||||||||||||||
| 299,756 | Integrys Energy Group Inc., (4), (5), (8) |
6.000% | Baa1 | 7,943,534 | ||||||||||||||||
| 88,577 | Interstate Power and Light Company, (5) |
5.100% | BBB | 2,127,620 | ||||||||||||||||
| 160,407 | SCE Trust V |
5.450% | Baa1 | 4,043,860 | ||||||||||||||||
| 130,000 | SCE Trust VI, (5) |
5.000% | Baa1 | 2,944,500 | ||||||||||||||||
| 86,891 | Southern Company |
5.250% | BBB | 2,066,268 | ||||||||||||||||
| Total Electric Utilities |
23,132,182 | |||||||||||||||||||
| 44 | NUVEEN |
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| Equity Real Estate Investment Trusts – 0.6% | ||||||||||||||||||||
| 76,450 | DDR Corporation, (4) |
6.250% | Ba1 | $ | 1,856,971 | |||||||||||||||
| 152,294 | Digital Realty Trust Inc., (4) |
7.375% | Baa3 | 4,011,424 | ||||||||||||||||
| 2,100 | Kimco Realty Corporation,. |
5.250% | Baa2 | 48,762 | ||||||||||||||||
| 18,639 | Kimco Realty Corporation, (4) |
5.625% | Baa2 | 443,049 | ||||||||||||||||
| 300 | Kimco Realty Corporation, |
5.500% | Baa2 | 7,143 | ||||||||||||||||
| 82,301 | Prologis Inc., (8) |
8.540% | BBB | 5,702,595 | ||||||||||||||||
| 3,000 | Public Storage, Inc. |
5.625% | A3 | 75,240 | ||||||||||||||||
| 1,116 | Public Storage, Inc. |
5.200% | A3 | 26,371 | ||||||||||||||||
| 2,705 | Public Storage, Inc. |
5.050% | A3 | 63,216 | ||||||||||||||||
| 12,199 | Ventas Realty LP, (4) |
5.450% | BBB+ | 307,171 | ||||||||||||||||
| 2,000 | Vornado Realty Trust. |
5.250% | BBB– | 48,380 | ||||||||||||||||
| Total Equity Real Estate Investment Trusts |
12,590,322 | |||||||||||||||||||
| Food Products – 0.6% | ||||||||||||||||||||
| 91,900 | Dairy Farmers of America Inc., 144A, (8) |
7.875% | Baa3 | 9,457,934 | ||||||||||||||||
| 32,500 | Dairy Farmers of America Inc., 144A, (8) |
7.875% | Baa3 | 3,719,729 | ||||||||||||||||
| Total Food Products |
13,177,663 | |||||||||||||||||||
| Insurance – 3.1% | ||||||||||||||||||||
| 298,680 | Aegon N.V |
6.375% | Baa1 | 7,634,261 | ||||||||||||||||
| 608,741 | Allstate Corporation, (4) |
5.100% | Baa1 | 15,784,653 | ||||||||||||||||
| 54,297 | American Financial Group, (4) |
6.250% | Baa2 | 1,432,898 | ||||||||||||||||
| 33,829 | Arch Capital Group Limited |
5.250% | BBB | 788,554 | ||||||||||||||||
| 84,899 | Aspen Insurance Holdings Limited, (5) |
5.950% | BBB– | 2,217,562 | ||||||||||||||||
| 131,293 | Axis Capital Holdings Limited |
5.500% | BBB | 3,244,250 | ||||||||||||||||
| 307,730 | Hartford Financial Services Group Inc., (4), (5) |
7.875% | BBB– | 8,936,479 | ||||||||||||||||
| 524,885 | Prudential PLC |
6.750% | A– | 13,746,737 | ||||||||||||||||
| 416,100 | Reinsurance Group of America Inc., (4) |
6.200% | BBB | 11,584,224 | ||||||||||||||||
| 10,000 | W.R. Berkley Corporation, (4) |
5.625% | BBB– | 246,000 | ||||||||||||||||
| Total Insurance |
65,615,618 | |||||||||||||||||||
| Multi-Utilities – 0.3% | ||||||||||||||||||||
| 280,000 | DTE Energy Company. |
5.250% | Baa2 | 6,776,000 | ||||||||||||||||
| U.S. Agency – 0.7% | ||||||||||||||||||||
| 132,750 | Farm Credit Bank of Texas, 144A, (4), (8) |
6.750% | Baa1 | 14,436,563 | ||||||||||||||||
| Wireless Telecommunication Services – 0.3% | ||||||||||||||||||||
| 90,850 | Telephone and Data Systems Inc., (4) |
7.000% | BB+ | 2,253,080 | ||||||||||||||||
| 131,990 | Telephone and Data Systems Inc., (4) |
6.875% | BB+ | 3,279,952 | ||||||||||||||||
| 11,826 | United States Cellular Corporation, (4) |
7.250% | Ba1 | 294,822 | ||||||||||||||||
| 10,591 | United States Cellular Corporation, (4) |
6.950% | Ba1 | 258,738 | ||||||||||||||||
| Total Wireless Telecommunication Services |
6,086,592 | |||||||||||||||||||
| Total $25 Par (or similar) Retail Preferred (cost $311,624,124) |
|
328,322,148 | ||||||||||||||||||
| Shares | Description (1), (9) | Value | ||||||||||||||||||
| INVESTMENT COMPANIES – 1.1% (0.8% of Total Investments) |
| |||||||||||||||||||
| 966,571 | Blackrock Credit Allocation Income Trust IV, (5) |
$ | 12,536,426 | |||||||||||||||||
| 646,421 | John Hancock Preferred Income Fund III, (5) |
11,402,866 | ||||||||||||||||||
| Total Investment Companies (cost $34,130,200) |
|
23,939,292 | ||||||||||||||||||
| NUVEEN | 45 |
| JPS | Nuveen Preferred and Income Securities Fund | |||
| Portfolio of Investments (continued) | January 31, 2018 (Unaudited) |
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| CORPORATE BONDS – 0.8% (0.6% of Total Investments) |
| |||||||||||||||||||
| Insurance – 0.7% | ||||||||||||||||||||
| $ | 5,000 | AIG Life Holdings Inc., 144A, (5) |
8.125% | 3/15/46 | Baa2 | $ | 7,075,000 | |||||||||||||
| 6,150 | Liberty Mutual Group Inc., 144A, (4), (5) |
7.697% | 10/15/97 | BBB+ | 8,610,148 | |||||||||||||||
| 11,150 | Total Insurance |
15,685,148 | ||||||||||||||||||
| Wireless Telecommunication Services – 0.1% | ||||||||||||||||||||
| 1,600 | Koninklijke KPN NV, 144A, (4) |
7.000% | 3/28/73 | BB+ | 1,804,000 | |||||||||||||||
| $ | 12,750 | Total Corporate Bonds (cost $14,938,944) |
|
17,489,148 | ||||||||||||||||
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| CONVERTIBLE PREFERRED SECURITIES – 0.8 (0.5% of Total Investments) |
| |||||||||||||||||||
| Banks – 0.8% | ||||||||||||||||||||
| 12,700 | Wells Fargo & Company, (5) |
7.500% | Baa2 | $ | 16,256,000 | |||||||||||||||
| Total Convertible Preferred Securities (cost $15,192,422) |
16,256,000 | |||||||||||||||||||
| Total Long-Term Investments (cost $2,795,592,127) |
3,027,374,659 | |||||||||||||||||||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Value | ||||||||||||||||
| SHORT-TERM INVESTMENTS – 3.3% (2.3% of Total Investments) |
| |||||||||||||||||||
| REPURCHASE AGREEMENTS – 3.3% (2.3% of Total Investments) |
| |||||||||||||||||||
| $ | 69,723 | Repurchase Agreement with Fixed Income Clearing Corporation, dated
1/31/18, repurchase price $69,724,215, |
0.540% | 2/01/18 | $ | 69,723,169 | ||||||||||||||
| Total Short-Term Investments (cost $69,723,169) |
69,723,169 | |||||||||||||||||||
| Total Investments (cost $2,865,315,296) – 147.3% |
3,097,097,828 | |||||||||||||||||||
| Borrowings – (40.2)% (10), (11) |
(845,300,000 | ) | ||||||||||||||||||
| Reverse Repurchase Agreements – (9.5)% (12) |
(200,000,000 | ) | ||||||||||||||||||
| Other Assets Less Liabilities – 2.4% (13) |
50,669,165 | |||||||||||||||||||
| Net Assets Applicable to Common Shares – 100% |
$ | 2,102,466,993 | ||||||||||||||||||
Investments in Derivatives
Interest Rate Swaps – OTC Uncleared
| Counterparty | Notional Amount |
Fund Pay/Receive Floating Rate |
Floating Rate Index | Fixed Rate (Annualized) |
Fixed Rate Payment Frequency |
Effective Date (14) |
Optional Termination Date |
Maturity Date |
Value | Unrealized Appreciation (Depreciation) |
||||||||||||||||||||||||||||||
| Morgan Stanley Capital Services, LLC |
$ | 521,000,000 | Receive | 1-Month LIBOR | 1.994 | % | Monthly | 6/01/18 | 7/01/25 | 7/01/27 | $ | 18,206,126 | $ | 18,206,126 | ||||||||||||||||||||||||||
| Total unrealized appreciation on interest rate swaps |
|
$ | 18,206,126 | |||||||||||||||||||||||||||||||||||||
| 46 | NUVEEN |
For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.
| (1) | All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted. |
| (2) | For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies. |
| (3) | Perpetual security. Maturity date is not applicable. |
| (4) | Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in reverse repurchase agreements. As of the end of the reporting period, investments with a value of $467,076,830 have been pledged as collateral for reverse repurchase agreements. |
| (5) | Investment, or portion of investment, is hypothecated as described in the Notes to Financial Statements, Note 8 – Fund Leverage, Rehypothecation. The total value of investments hypothecated as of the end of the reporting period was $471,556,757. |
| (6) | Variable rate security. The rate shown is the coupon as of the end of the reporting period. |
| (7) | Contingent Capital Securities (“CoCos”) are hybrid securities with loss absorption characteristics built into the terms of the security for the benefit of the issuer. For example, the terms may specify an automatic write-down of principal or a mandatory conversion into the issuer’s common stock under certain adverse circumstances, such as the issuer’s capital ratio falling below a specified level. |
| (8) | For fair value measurement disclosure purposes, investment classified as Level 2. See Notes to Financial Statements, Note 2 – Investment Valuation and Fair Value Measurements for more information. |
| (9) | A copy of the most recent financial statements for these investment companies can be obtained directly from the Securities and Exchange Commission on its website at http:// www.sec.gov. |
| (10) | The Fund may pledge up to 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives, when applicable) in the Portfolio of Investments as collateral for borrowings. As of the end of the reporting period, investments with a value of $1,949,577,351 have been pledged as collateral for borrowings. |
| (11) | Borrowings as a percentage of Total Investments are 27.3%. |
| (12) | Reverse Repurchase Agreements as a percentage of Total Investments is 6.5%. |
| (13) | Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter (“OTC”) derivatives as presented the Statement of Assets and Liabilities, when applicable. The unrealized appreciation (depreciation) of OTC-cleared and exchange-traded derivatives is recognized as part of cash collateral at brokers and/or the receivable or payable for variation margin as presented on the Statement of Assets and Liabilities, when applicable. |
| (14) | Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each contract. |
| 144A | Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers. |
| Reg S | Regulation S allows U.S. companies to sell securities to persons or entities located outside of the United States without registering those securities with the Securities and Exchange Commission. Specifically, Regulation S provides a safe harbor from the registration requirements of the Securities Act for the offers and sales of securities by both foreign and domestic issuers that are made outside the United States. |
| LIBOR | London Inter-Bank Offered Rate |
See accompanying notes to financial statements.
| NUVEEN | 47 |
JPT
| Nuveen Preferred and Income 2022 Term Fund |
||
| Portfolio of Investments |
January 31, 2018 (Unaudited) |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| LONG-TERM INVESTMENTS – 123.3% (99.0% of Total Investments) |
|
|||||||||||||||||||
| $1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 97.5% (78.3% of Total Investments) |
|
|||||||||||||||||||
| Automobiles – 2.7% | ||||||||||||||||||||
| $ | 4,385 | General Motors Financial Company Inc. |
5.750% | N/A (3) | BB+ | $ | 4,527,512 | |||||||||||||
| Banks – 36.4% | ||||||||||||||||||||
| 2,730 | Bank of America Corporation |
6.500% | N/A (3) | BBB– | 3,054,188 | |||||||||||||||
| 2,000 | Bank of America Corporation |
6.300% | N/A (3) | BBB– | 2,240,000 | |||||||||||||||
| 2,815 | Bank of America Corporation |
6.250% | N/A (3) | BBB– | 3,037,104 | |||||||||||||||
| 660 | Bank of America Corporation |
8.000% | N/A (3) | BBB– | 668,864 | |||||||||||||||
| 1,078 | Bank of America Corporation |
8.125% | N/A (3) | BBB– | 1,099,560 | |||||||||||||||
| 2,000 | Barclays Bank PLC, 144A |
10.180% | 6/12/21 | A– | 2,413,394 | |||||||||||||||
| 2,480 | Citigroup Inc. |
6.125% | N/A (3) | BB+ | 2,622,352 | |||||||||||||||
| 1,000 | Citigroup Inc. |
5.950% | N/A (3) | BB+ | 1,051,250 | |||||||||||||||
| 270 | Citigroup Inc. |
5.950% | N/A (3) | BB+ | 281,813 | |||||||||||||||
| 3,005 | Citigroup Inc. |
5.875% | N/A (3) | BB+ | 3,110,175 | |||||||||||||||
| 1,500 | Citizens Financial Group Inc. |
5.500% | N/A (3) | BB+ | 1,540,800 | |||||||||||||||
| 2,000 | Commerzbank AG, 144A |
8.125% | 9/19/23 | BBB | 2,384,895 | |||||||||||||||
| 3,000 | JP Morgan Chase & Company |
6.750% | N/A (3) | BBB– | 3,352,500 | |||||||||||||||
| 4,845 | JP Morgan Chase & Company |
5.300% | N/A (3) | BBB– | 4,991,561 | |||||||||||||||
| 1,400 | KeyCorp Convertible Preferred Stock |
5.000% | N/A (3) | Baa3 | 1,424,500 | |||||||||||||||
| 6,500 | Lloyds Bank PLC, 144A |
12.000% | N/A (3) | BBB– | 8,675,465 | |||||||||||||||
| 680 | M&T Bank Corporation |
6.450% | N/A (3) | Baa2 | 767,550 | |||||||||||||||
| 1,500 | M&T Bank Corporation |
5.125% | N/A (3) | Baa2 | 1,574,625 | |||||||||||||||
| 1,500 | PNC Financial Services |
5.000% | N/A (3) | Baa2 | 1,572,750 | |||||||||||||||
| 1,500 | PNC Financial Services Inc. |
6.750% | N/A (3) | Baa2 | 1,636,875 | |||||||||||||||
| 2,500 | Royal Bank of Scotland Group PLC |
7.648% | N/A (3) | Ba2 | 3,287,500 | |||||||||||||||
| 850 | SunTrust Bank Inc. |
5.625% | N/A (3) | Baa3 | 881,875 | |||||||||||||||
| 1,100 | SunTrust Bank Inc. |
5.050% | N/A (3) | Baa3 | 1,102,750 | |||||||||||||||
| 500 | US Bancorp, Convertible Bonds, Floating Rate |
5.125% | N/A (3) | A3 | 518,750 | |||||||||||||||
| 1,500 | Wachovia Capital Trust III |
5.570% | N/A (3) | Baa2 | 1,507,125 | |||||||||||||||
| 1,105 | Wells Fargo & Company |
7.980% | N/A (3) | Baa2 | 1,115,387 | |||||||||||||||
| 2,230 | Wells Fargo & Company |
5.900% | N/A (3) | Baa2 | 2,361,570 | |||||||||||||||
| 3,245 | Wells Fargo & Company |
5.875% | N/A (3) | Baa2 | 3,529,587 | |||||||||||||||
| Total Banks |
61,804,765 | |||||||||||||||||||
| Capital Markets – 7.8% | ||||||||||||||||||||
| 1,670 | Bank of New York Mellon |
4.950% | N/A (3) | Baa1 | 1,707,993 | |||||||||||||||
| 4,905 | Goldman Sachs Group Inc. |
5.375% | N/A (3) | Ba1 | 5,064,412 | |||||||||||||||
| 3,250 | Goldman Sachs Group Inc. |
5.300% | N/A (3) | Ba1 | 3,384,063 | |||||||||||||||
| 1,020 | Morgan Stanley |
5.550% | N/A (3) | BB+ | 1,054,425 | |||||||||||||||
| 2,000 | State Street Corporation |
5.250% | N/A (3) | Baa1 | 2,085,000 | |||||||||||||||
| Total Capital Markets |
13,295,893 | |||||||||||||||||||
| Commercial Services & Supplies – 1.9% | ||||||||||||||||||||
| 3,000 | AerCap Global Aviation Trust, 144A |
6.500% | 6/15/45 | BB | 3,270,000 | |||||||||||||||
| Consumer Finance – 3.8% | ||||||||||||||||||||
| 1,000 | American Express Company |
5.200% | N/A (3) | Baa2 | 1,023,750 | |||||||||||||||
| 1,000 | American Express Company |
4.900% | N/A (3) | Baa2 | 1,015,000 | |||||||||||||||
| 3,200 | Capital One Financial Corporation |
5.550% | N/A (3) | Baa3 | 3,304,000 | |||||||||||||||
| 1,075 | Discover Financial Services |
5.500% | N/A (3) | BB– | 1,091,797 | |||||||||||||||
| Total Consumer Finance |
6,434,547 | |||||||||||||||||||
| Diversified Financial Services – 5.8% | ||||||||||||||||||||
| 1,000 | BNP Paribas, 144A |
7.195% | N/A (3) | BBB | 1,156,250 | |||||||||||||||
| 48 | NUVEEN |
| Principal Amount (000)/ Shares |
Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
| Diversified Financial Services (continued) | ||||||||||||||||||||
| $ | 1,000 | Depository Trust & Clearing Corporation, 144A |
4.875% | N/A (3) | A | $ | 1,030,000 | |||||||||||||
| 4,000 | Rabobank Nederland, 144A |
11.000% | N/A (3) | Baa2 | 4,415,000 | |||||||||||||||
| 3,000 | Voya Financial Inc. |
5.650% | 5/15/53 | Baa3 | 3,187,500 | |||||||||||||||
| Total Diversified Financial Services |
9,788,750 | |||||||||||||||||||
| Electric Utilities – 4.1% | ||||||||||||||||||||
| 1,270 | Electricite de France, 144A |
5.250% | N/A (3) | BBB | 1,304,924 | |||||||||||||||
| 5,000 | Emera, Inc. |
6.750% | 6/15/76 | BBB– | 5,650,000 | |||||||||||||||
| Total Electric Utilities |
6,954,924 | |||||||||||||||||||
| Food Products – 5.1% | ||||||||||||||||||||
| 2,500 | Dairy Farmers of America Inc., 144A |
7.125% | N/A (3) | Baa3 | 2,756,250 | |||||||||||||||
| 755 | Land O Lakes Capital Trust I, 144A |
7.450% | 3/15/28 | Ba1 | 856,925 | |||||||||||||||
| 3,080 | Land O’ Lakes Incorporated, 144A |
7.250% | N/A (3) | BB | 3,426,500 | |||||||||||||||
| 1,450 | Land O’ Lakes Incorporated, 144A |
8.000% | N/A (3) | BB | 1,645,750 | |||||||||||||||
| Total Food Products |
8,685,425 | |||||||||||||||||||
| Industrial Conglomerates – 3.7% | ||||||||||||||||||||
| 6,262 | General Electric Capital Corporation |
5.000% | N/A (3) | A– | 6,324,620 | |||||||||||||||
| Insurance – 19.5% | ||||||||||||||||||||
| 4,000 | AXA SA |
8.600% | 12/15/30 | A3 | 5,690,800 | |||||||||||||||
| 9,000 | Financial Security Assurance Holdings, 144A |
6.400% | 12/15/66 | BBB+ | 8,955,000 | |||||||||||||||
| 1,000 | La Mondiale SAM, Reg S |
7.625% | N/A (3) | BBB | 1,050,790 | |||||||||||||||
| 4,000 | MetLife Inc. |
5.250% | N/A (3) | BBB | 4,110,400 | |||||||||||||||
| 1,000 | MetLife Inc., 144A |
9.250% | 4/08/38 | BBB | 1,468,750 | |||||||||||||||
| 1,000 | Prudential Financial Inc. |
5.875% | 9/15/42 | BBB+ | 1,095,000 | |||||||||||||||
| 4,000 | Prudential Financial Inc. |
8.875% | 6/15/38 | BBB+ | 4,089,040 | |||||||||||||||
| 818 | QBE Insurance Group Limited, Reg S |
6.750% | 12/02/44 | BBB | 920,659 | |||||||||||||||
| 5,000 | QBE Insurance Group Limited, 144A |
7.500% | 11/24/43 | Baa2 | 5,756,250 | |||||||||||||||
| Total Insurance |
33,136,689 | |||||||||||||||||||
| Metals & Mining – 2.7% | ||||||||||||||||||||
| 1,250 | BHP Billiton Finance USA Limited, 144A |
6.750% | 10/19/75 | A– | 1,455,624 | |||||||||||||||
| 3,000 | BHP Billiton Finance USA Limited, 144A |
6.250% | 10/19/75 | A– | 3,221,250 | |||||||||||||||
| Total Metals & Mining |
4,676,874 | |||||||||||||||||||
| Oil, Gas & Consumable Fuels – 0.5% | ||||||||||||||||||||
| 865 | Enterprise Products Operating LLP |
5.250% | 8/16/77 | Baa2 | 862,838 | |||||||||||||||
| U.S. Agency – 3.5% | ||||||||||||||||||||
| 5,000 | Farm Credit Bank of Texas, 144A |
10.000% | N/A (3) | Baa1 | 5,875,000 | |||||||||||||||
| Total $1,000 Par (or similar) Institutional Preferred (cost $162,822,706) |
|
165,637,837 | ||||||||||||||||||
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| $25 PAR (OR SIMILAR) RETAIL PREFERRED – 25.8% (20.7% of Total Investments) |
| |||||||||||||||||||
| Banks – 5.2% | ||||||||||||||||||||
| 2,500 | AgriBank FCB, (4) |
6.875% | BBB+ | $ | 274,063 | |||||||||||||||
| 60,000 | Citigroup Inc. |
7.125% | BB+ | 1,694,400 | ||||||||||||||||
| 5,826 | Cobank Agricultural Credit Bank, (4) |
6.200% | BBB+ | 623,382 | ||||||||||||||||
| 50,000 | Fifth Third Bancorp. |
6.625% | Baa3 | 1,414,000 | ||||||||||||||||
| 75,000 | Huntington BancShares Inc. |
6.250% | Baa3 | 2,004,000 | ||||||||||||||||
| 100,000 | Regions Financial Corporation |
6.375% | BB+ | 2,749,000 | ||||||||||||||||
| Total Banks |
8,758,845 | |||||||||||||||||||
| Capital Markets – 5.5% | ||||||||||||||||||||
| 50,000 | Morgan Stanley |
7.125% | BB+ | 1,422,500 | ||||||||||||||||
| NUVEEN | 49 |
| JPT | Nuveen Preferred and Income 2022 Term Fund | |||
| Portfolio of Investments (continued) | January 31, 2018 (Unaudited) |
| Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
| Capital Markets (continued) | ||||||||||||||||||||
| 175,000 | Morgan Stanley |
6.875% | BB+ | $ | 4,910,500 | |||||||||||||||
| 69,700 | Morgan Stanley |
5.850% | BB+ | 1,822,655 | ||||||||||||||||
| 42,821 | State Street Corporation |
5.350% | Baa1 | 1,126,192 | ||||||||||||||||
| Total Capital Markets |
9,281,847 | |||||||||||||||||||
| Food Products – 3.8% | ||||||||||||||||||||
| 46,859 | CHS Inc. |
7.875% | N/R | 1,348,133 | ||||||||||||||||
| 81,867 | CHS Inc. |
7.500% | N/R | 2,248,067 | ||||||||||||||||
| 75,000 | CHS Inc. |
7.100% | N/R | 2,028,000 | ||||||||||||||||
| 31,132 | CHS Inc. |
6.750% | N/R | 820,640 | ||||||||||||||||
| Total Food Products |
6,444,840 | |||||||||||||||||||
| Insurance – 6.4% | ||||||||||||||||||||
| 73,215 | Aspen Insurance Holdings Limited |
5.950% | BBB– | 1,912,376 | ||||||||||||||||
| 74,900 | Aspen Insurance Holdings Limited |
5.625% | BBB– | 1,849,281 | ||||||||||||||||
| 78,986 | Delphi Financial Group, Inc., (4) |
1.872% | BB+ | 1,836,425 | ||||||||||||||||
| 49,995 | Hartford Financial Services Group Inc. |
7.875% | BBB– | 1,451,855 | ||||||||||||||||
| 60,000 | Maiden Holdings NA Limited |
7.750% | N/R | 1,320,600 | ||||||||||||||||
| 53,716 | Reinsurance Group of America Inc. |
6.200% | BBB | 1,495,453 | ||||||||||||||||
| 35,002 | Reinsurance Group of America, Inc. |
5.750% | BBB | 941,554 | ||||||||||||||||
| Total Insurance |
10,807,544 | |||||||||||||||||||
| Mortgage Real Estate Investment Trusts – 0.3% | ||||||||||||||||||||
| 20,787 | Wells Fargo REIT |
6.375% | BBB | 535,265 | ||||||||||||||||
| Oil, Gas & Consumable Fuels – 2.0% | ||||||||||||||||||||
| 80,000 | Nustar Energy LP |
8.500% | B1 | 2,017,600 | ||||||||||||||||
| 50,000 | Nustar Energy LP |
7.625% | B1 | 1,181,500 | ||||||||||||||||
| 9,796 | Nustar Logistics Limited Partnership |
8.456% | B+ | 248,525 | ||||||||||||||||
| Total Oil, Gas & Consumable Fuels |
3,447,625 | |||||||||||||||||||
| Thrifts & Mortgage Finance – 2.0% | ||||||||||||||||||||
| 6,255 | Federal Agricultural Mortgage Corporation |
6.875% | N/R | 169,823 | ||||||||||||||||
| 15,135 | Federal Agricultural Mortgage Corporation |
6.000% | N/R | 404,861 | ||||||||||||||||
| 103,800 | New York Community Bancorp Inc. |
6.375% | Ba1 | 2,905,362 | ||||||||||||||||
| Total Thrifts & Mortgage Finance |
3,480,046 | |||||||||||||||||||
| U.S. Agency – 0.6% | ||||||||||||||||||||
| 10,000 | Farm Credit Bank of Texas, 144A, (4) |
6.750% | Baa1 | 1,087,500 | ||||||||||||||||
| Total $25 Par (or similar) Retail Preferred (cost $44,057,313) |
43,843,512 | |||||||||||||||||||
| Total Long-Term Investments (cost $206,880,019) |
209,481,349 | |||||||||||||||||||
| Principal Amount (000) |
Description (1) | Coupon | Maturity | Value | ||||||||||||||||
| SHORT-TERM INVESTMENTS – 1.2% (1.0% of Total Investments) |
| |||||||||||||||||||
| REPURCHASE AGREEMENTS – 1.2% (1.0% of Total Investments) |
| |||||||||||||||||||
| $ | 2,080 | Repurchase Agreement with Fixed Income Clearing
Corporation, |
0.540% | 2/01/18 | $ | 2,079,568 | ||||||||||||||
| Total Short-Term Investments (cost $2,079,568) |
2,079,568 | |||||||||||||||||||
| Total Investments (cost $208,959,587) – 124.5% |
211,560,917 | |||||||||||||||||||
| Borrowings – (25.0)% (5), (6) |
(42,500,000 | ) | ||||||||||||||||||
| Other Assets Less Liabilities – 0.5% (7) |
897,183 | |||||||||||||||||||
| Net Assets Applicable to Common Shares – 100% |
$ | 169,958,100 | ||||||||||||||||||
| 50 | NUVEEN |
Investments in Derivatives
Futures Contracts
| Description | Contract Position |
Number of Contracts |
Expiration Date |
Notional Amount |
Value | Unrealized Appreciation (Depreciation) |
Variation Margin Receivable/ (Payable) |
|||||||||||||||||||||
| U.S. Treasury 5-Year Note |
Short | (25 | ) | 3/18 | $ | (2,911,073 | ) | $ | (2,867,773 | ) | $ | 43,299 | $ | 3,125 | ||||||||||||||
| Total receivable for variation margin on futures contracts |
|
$ | 3,125 | |||||||||||||||||||||||||
For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.
| (1) | All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted. |
| (2) | For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies. |
| (3) | Perpetual security. Maturity date is not applicable. |
| (4) | For fair value measurement disclosure purposes, investment classified as Level 2. See Notes to Financial Statements, Note 2 – Investment Valuation and Fair Value Measurements for more information. |
| (5) | Borrowings as a percentage of Total Investments are 20.1%. |
| (6) | The Fund may pledge up to 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives, when applicable) in the Portfolio of Investments as collateral for borrowings. |
| (7) | Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter (“OTC”) derivatives as presented the Statement of Assets and Liabilities, when applicable. The unrealized appreciation (depreciation) of OTC-cleared and exchange-traded derivatives is recognized as part of cash collateral at brokers and/or the receivable or payable for variation margin as presented on the Statement of Assets and Liabilities, when applicable. |
| 144A | Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers. |
| Reg S | Regulation S allows U.S. companies to sell securities to persons or entities located outside of the United States without registering those securities with the Securities and Exchange Commission. Specifically, Regulation S provides a safe harbor from the registration requirements of the Securities Act for the offers and sales of securities by both foreign and domestic issuers that are made outside the United States. |
| REIT | Real Estate Investment Trust. |
See accompanying notes to financial statements.
| NUVEEN | 51 |
|
Assets and Liabilities |
January 31, 2018 (Unaudited) | |||||
| JPC | JPI | JPS | JPT | |||||||||||||
| Assets |
||||||||||||||||
| Long-term investments, at value (cost $1,551,114,856, $751,695,036, $2,795,592,127 and $206,880,019, respectively) |
$ | 1,626,969,796 | $ | 801,688,636 | $ | 3,027,374,659 | $ | 209,481,349 | ||||||||
| Short-term investments, at value (cost approximates value) |
21,717,039 | 2,594,925 | 69,723,169 | 2,079,568 | ||||||||||||
| Cash |
50,998 | 3,177,281 | 5,583,334 | 1,486,407 | ||||||||||||
| Cash collateral at broker for investments in futures contracts(1) |
— | — | — | 14,000 | ||||||||||||
| Unrealized appreciation on interest rate swaps |
9,697,121 | 2,883,388 | 18,206,126 | — | ||||||||||||
| Receivable for: |
||||||||||||||||
| Dividends |
306,407 | 30,222 | 1,213,815 | — | ||||||||||||
| Interest |
16,855,198 | 8,466,751 | 40,363,485 | 1,990,551 | ||||||||||||
| Investments sold |
124,822 | — | 6,597,265 | — | ||||||||||||
| Reclaims |
82,133 | — | — | — | ||||||||||||
| Variation margin on futures contracts |
— | — | — | 3,125 | ||||||||||||
| Other assets |
263,910 | 46,697 | 510,791 | 1,046 | ||||||||||||
| Total assets |
1,676,067,424 | 818,887,900 | 3,169,572,644 | 215,056,046 | ||||||||||||
| Liabilities |
||||||||||||||||
| Borrowings |
437,000,000 | 225,000,000 | 845,300,000 | 42,500,000 | ||||||||||||
| Reverse repurchase agreements |
125,000,000 | — | 200,000,000 | — | ||||||||||||
| Payable for: |
||||||||||||||||
| Dividends |
6,607,064 | 3,185,794 | 12,513,215 | 828,736 | ||||||||||||
| Investments purchased |
4,364,132 | 3,177,281 | 5,838,249 | 1,486,406 | ||||||||||||
| Accrued expenses: |
||||||||||||||||
| Interest |
74,726 | 30,238 | 134,507 | 42,214 | ||||||||||||
| Management fees |
1,147,666 | 588,176 | 2,140,629 | 155,989 | ||||||||||||
| Trustees fees |
272,489 | 48,649 | 527,115 | 1,894 | ||||||||||||
| Other |
373,297 | 181,014 | 651,936 | 82,707 | ||||||||||||
| Total liabilities |
574,839,374 | 232,211,152 | 1,067,105,651 | 45,097,946 | ||||||||||||
| Net assets applicable to common shares |
$ | 1,101,228,050 | $ | 586,676,748 | $ | 2,102,466,993 | $ | 169,958,100 | ||||||||
| Common shares outstanding |
103,332,549 | 22,757,308 | 203,817,868 | 6,828,441 | ||||||||||||
| Net asset value (“NAV”) per common share outstanding |
$ | 10.66 | $ | 25.78 | $ | 10.32 | $ | 24.89 | ||||||||
| Net assets applicable to common shares consist of: |
||||||||||||||||
| Common shares, $0.01 par value per share |
$ | 1,033,325 | $ | 227,573 | $ | 2,038,179 | $ | 68,284 | ||||||||
| Paid-in surplus |
1,048,411,305 | 540,280,742 | 2,198,860,599 | 167,762,028 | ||||||||||||
| Undistributed (Over-distribution of) net investment income |
(6,520,924 | ) | (2,662,340 | ) | (2,417,773 | ) | 290,567 | |||||||||
| Accumulated net realized gain (loss) |
(27,246,323 | ) | (4,046,215 | ) | (346,002,670 | ) | (807,408 | ) | ||||||||
| Net unrealized appreciation (depreciation) |
85,550,667 | 52,876,988 | 249,988,658 | 2,644,629 | ||||||||||||
| Net assets applicable to common shares |
$ | 1,101,228,050 | $ | 586,676,748 | $ | 2,102,466,993 | $ | 169,958,100 | ||||||||
| Authorized shares: |
||||||||||||||||
| Common |
Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||
| Preferred |
Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||
| (1) | Cash pledged to collateralize the net payment obligations for investments in derivatives. |
See accompanying notes to financial statements.
| 52 | NUVEEN |
|
Operations |
Six Months Ended January 31, 2018 (Unaudited) | |||||
| JPC | JPI | JPS | JPT | |||||||||||||
| Investment Income |
||||||||||||||||
| Dividends |
$ | 22,223,168 | $ | 7,340,809 | $ | 15,661,864 | $ | 1,671,775 | ||||||||
| Interest |
33,563,077 | 17,874,565 | 80,792,286 | 4,779,739 | ||||||||||||
| Other |
106,117 | 46,844 | 122,241 | — | ||||||||||||
| Total investment income |
55,892,362 | 25,262,218 | 96,576,391 | 6,451,514 | ||||||||||||
| Expenses |
||||||||||||||||
| Management fees |
6,826,565 | 3,489,559 | 12,713,349 | 933,083 | ||||||||||||
| Interest expense |
6,283,479 | 2,520,094 | 11,177,249 | 460,534 | ||||||||||||
| Custodian fees |
90,769 | 43,807 | 154,217 | 17,814 | ||||||||||||
| Trustees fees |
28,054 | 13,468 | 51,989 | 3,396 | ||||||||||||
| Professional fees |
54,581 | 24,817 | 56,811 | 23,877 | ||||||||||||
| Shareholder reporting expenses |
113,337 | 39,027 | 224,525 | 14,679 | ||||||||||||
| Shareholder servicing agent fees |
953 | 51 | 2,379 | 10 | ||||||||||||
| Stock exchange listing fees |
15,184 | 3,516 | 30,559 | — | ||||||||||||
| Investor relations expenses |
63,114 | 27,969 | 101,760 | 10,030 | ||||||||||||
| Other |
118,937 | 19,868 | 25,730 | 7,558 | ||||||||||||
| Total expenses |
13,594,973 | 6,182,176 | 24,538,568 | 1,470,981 | ||||||||||||
| Net investment income (loss) |
42,297,389 | 19,080,042 | 72,037,823 | 4,980,533 | ||||||||||||
| Realized and Unrealized Gain (Loss) |
||||||||||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments and foreign currency |
(2,717,042 | ) | 1,577,853 | 10,609,993 | (360,492 | ) | ||||||||||
| Futures contracts |
— | — | — | 22,100 | ||||||||||||
| Swaps |
(1,433,628 | ) | (1,831,550 | ) | (2,855,167 | ) | — | |||||||||
| Change in net unrealized appreciation (depreciation) of: |
||||||||||||||||
| Investments and foreign currency |
(31,203,757 | ) | (9,354,290 | ) | (42,592,297 | ) | (4,439,937 | ) | ||||||||
| Futures contracts |
— | — | — | 62,379 | ||||||||||||
| Swaps |
11,833,987 | 5,507,342 | 22,430,428 | — | ||||||||||||
| Net realized and unrealized gain (loss) |
(23,520,440 | ) | (4,100,645 | ) | (12,407,043 | ) | (4,715,950 | ) | ||||||||
| Net increase (decrease) in net assets applicable to common shares from operations |
$ | 18,776,949 | $ | 14,979,397 | $ | 59,630,780 | $ | 264,583 | ||||||||
See accompanying notes to financial statements.
| NUVEEN | 53 |
|
Changes in Net Assets |
(Unaudited) | |||||
| JPC | JPI | |||||||||||||||
| Six Months Ended 1/31/18 |
Year |
Six Months Ended 1/31/18 |
Year |
|||||||||||||
| Operations |
||||||||||||||||
| Net investment income (loss) |
$ | 42,297,389 | $ | 70,018,749 | $ | 19,080,042 | $ | 39,802,785 | ||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments and foreign currency |
(2,717,042 | ) | 14,416,303 | 1,577,853 | 4,278,233 | |||||||||||
| Futures contracts |
— | — | — | — | ||||||||||||
| Options written |
— | (209,996 | ) | — | — | |||||||||||
| Swaps |
(1,433,628 | ) | (3,792,884 | ) | (1,831,550 | ) | (4,309,652 | ) | ||||||||
| Change in net unrealized appreciation (depreciation) of: |
||||||||||||||||
| Investments and foreign currency |
(31,203,757 | ) | 19,055,702 | (9,354,290 | ) | 24,073,726 | ||||||||||
| Futures contracts |
— | — | — | — | ||||||||||||
| Options written |
— | (7,871 | ) | — | — | |||||||||||
| Swaps |
11,833,987 | 10,000,912 | 5,507,342 | 9,159,385 | ||||||||||||
| Net increase (decrease) in net assets applicable to common shares from operations |
18,776,949 | 109,480,915 | 14,979,397 | 73,004,477 | ||||||||||||
| Distributions to Common Shareholders |
||||||||||||||||
| From net investment income |
(40,299,694 | ) | (75,131,263 | ) | (19,320,954 | ) | (40,143,229 | ) | ||||||||
| Return of capital |
— | (1,478,980 | ) | — | (1,638,466 | ) | ||||||||||
| Decrease in net assets applicable to common shares from distributions to common shareholders |
(40,299,694 | ) | (76,610,243 | ) | (19,320,954 | ) | (41,781,695 | ) | ||||||||
| Capital Share Transactions |
||||||||||||||||
| Common shares: |
||||||||||||||||
| Issued in the reorganizations |
— | 69,163,446 | — | — | ||||||||||||
| Proceeds from sale of shares, net of offering costs |
— | — | — | — | ||||||||||||
| Net proceeds from shares issued to shareholders due to reinvestment of distributions |
— | — | — | 73,445 | ||||||||||||
| Net increase (decrease) in net assets applicable to common shares from capital share transactions |
— | 69,163,446 | — | 73,445 | ||||||||||||
| Net increase (decrease) in net assets applicable to common shares |
(21,522,745 | ) | 102,034,118 | (4,341,557 | ) | 31,296,227 | ||||||||||
| Net assets applicable to common shares at the beginning of period |
1,122,750,795 | 1,020,716,677 | 591,018,305 | 559,722,078 | ||||||||||||
| Net assets applicable to common shares at the end of period |
$ | 1,101,228,050 | $ | 1,122,750,795 | $ | 586,676,748 | $ | 591,018,305 | ||||||||
| Undistributed (Over-distribution of) net investment income at the end of period |
$ | (6,520,924 | ) | $ | (8,518,619 | ) | $ | (2,662,340 | ) | $ | (2,421,428 | ) | ||||
See accompanying notes to financial statements.
| 54 | NUVEEN |
| JPS | JPT | |||||||||||||||
| Six Months Ended 1/31/18 |
Year |
Six Months Ended 1/31/18 |
Year 7/31/17 |
|||||||||||||
| Operations |
||||||||||||||||
| Net investment income (loss) |
$ | 72,037,823 | $ | 143,775,734 | $ | 4,980,533 | $ | 4,962,564 | ||||||||
| Net realized gain (loss) from: |
||||||||||||||||
| Investments and foreign currency |
10,609,993 | 6,326,326 | (360,492 | ) | (116,773 | ) | ||||||||||
| Futures contracts |
— | — | 22,100 | (434,242 | ) | |||||||||||
| Options written |
— | — | — | — | ||||||||||||
| Swaps |
(2,855,167 | ) | (7,551,821 | ) | — | — | ||||||||||
| Change in net unrealized appreciation (depreciation) of: |
||||||||||||||||
| Investments and foreign currency |
(42,592,297 | ) | 136,866,006 | (4,439,937 | ) | 7,041,267 | ||||||||||
| Futures contracts |
— | — | 62,379 | (19,080 | ) | |||||||||||
| Options written |
— | — | — | — | ||||||||||||
| Swaps |
22,430,428 | 19,942,616 | — | — | ||||||||||||
| Net increase (decrease) in net assets applicable to common shares from operations |
59,630,780 | 299,358,861 | 264,583 | 11,433,736 | ||||||||||||
| Distributions to Common Shareholders |
||||||||||||||||
| From net investment income |
(75,818,928 | ) | (151,632,579 | ) | (5,221,265 | ) | (4,349,266 | ) | ||||||||
| Return of capital |
— | — | — | — | ||||||||||||
| Decrease in net assets applicable to common shares from distributions to common shareholders |
(75,818,928 | ) | (151,632,579 | ) | (5,221,265 | ) | (4,349,266 | ) | ||||||||
| Capital Share Transactions |
||||||||||||||||
| Common shares: |
||||||||||||||||
| Issued in the reorganizations |
— | — | — | — | ||||||||||||
| Proceeds from sale of shares, net of offering costs |
— | — | — | 167,508,239 | ||||||||||||
| Net proceeds from shares issued to shareholders due to reinvestment of distributions |
109,881 | — | 123,729 | 98,071 | ||||||||||||
| Net increase (decrease) in net assets applicable to common shares from capital share transactions |
109,881 | — | 123,729 | 167,606,310 | ||||||||||||
| Net increase (decrease) in net assets applicable to common shares |
(16,078,267 | ) | 147,726,282 | (4,832,953 | ) | 174,690,780 | ||||||||||
| Net assets applicable to common shares at the beginning of period |
2,118,545,260 | 1,970,818,978 | 174,791,053 | 100,273 | ||||||||||||
| Net assets applicable to common shares at the end of period |
$ | 2,102,466,993 | $ | 2,118,545,260 | $ | 169,958,100 | $ | 174,791,053 | ||||||||
| Undistributed (Over-distribution of) net investment income at the end of period |
$ | (2,417,773 | ) | $ | 1,363,332 | $ | 290,567 | $ | 531,299 | |||||||
| * | For the period ended January 26, 2017 (commencement of operations) through July 31, 2017. |
See accompanying notes to financial statements.
| NUVEEN | 55 |
|
Cash Flows |
Six Months Ended January 31, 2018 (Unaudited) | |||||
| JPC | JPI | JPS | JPT | |||||||||||||
| Cash Flows from Operating Activities: |
||||||||||||||||
| Net Increase (Decrease) In Net Assets Applicable to Common Shares from Operations |
$ | 18,776,949 | $ | 14,979,397 | $ | 59,630,780 | $ | 264,583 | ||||||||
| Adjustments to reconcile the net increase (decrease) in net assets applicable to common shares from operations to net cash provided by (used in) operating activities: |
||||||||||||||||
| Purchases of investments |
(245,158,431 | ) | (91,089,453 | ) | (91,171,266 | ) | (28,524,235 | ) | ||||||||
| Proceeds from sales and maturities of investments |
214,558,118 | 90,200,014 | 157,089,915 | 28,935,394 | ||||||||||||
| Proceeds from (Purchases of) short-term investments, net |
16,864,547 | (2,594,925 | ) | (54,823,167 | ) | (804,011 | ) | |||||||||
| Premiums received (paid) for interest rate swaps |
1,605,108 | 1,646,888 | 3,195,850 | — | ||||||||||||
| Proceeds from litigation settlement |
43,383 | — | 11,078 | — | ||||||||||||
| Amortization (Accretion) of premiums and discounts, net |
737,482 | 160,764 | 788,813 | 161,992 | ||||||||||||
| (Increase) Decrease in: |
||||||||||||||||
| Cash collateral at brokers for investments in futures contracts |
— | 570,000 | — | 186,046 | ||||||||||||
| Receivable for dividends |
240,633 | 59,301 | (113,183 | ) | 3,095 | |||||||||||
| Receivable for interest |
(1,665,607 | ) | (695,097 | ) | (2,363,269 | ) | 82,268 | |||||||||
| Receivable for investments sold |
599,595 | 7,534,017 | (6,461,384 | ) | — | |||||||||||
| Receivable for reclaims |
(1,043 | ) | — | 1,920 | — | |||||||||||
| Receivable for variation margin on futures contracts |
— | — | — | (35,944 | ) | |||||||||||
| Other assets |
(20,914 | ) | (4,461 | ) | (35,940 | ) | 23,019 | |||||||||
| Increase (Decrease) in: |
||||||||||||||||
| Payable for investments purchased |
(16,954,764 | ) | 698,979 | 5,838,249 | 1,486,406 | |||||||||||
| Accrued interest |
(50,014 | ) | (21,665 | ) | (91,128 | ) | (8,086 | ) | ||||||||
| Accrued management fees |
43,644 | 785 | (87 | ) | (2,305 | ) | ||||||||||
| Accrued Trustees fees |
30,040 | 4,520 | 56,248 | (4,334 | ) | |||||||||||
| Accrued other expenses |
106,880 | 44,182 | 184,603 | (13,181 | ) | |||||||||||
| Net realized (gain) loss from investments and foreign currency |
2,717,042 | (1,577,853 | ) | (10,609,993 | ) | 360,492 | ||||||||||
| Change in net unrealized (appreciation) depreciation of: |
||||||||||||||||
| Investments and foreign currency |
31,203,757 | 9,354,290 | 42,592,297 | 4,439,937 | ||||||||||||
| Swaps |
(11,833,987 | ) | (5,507,342 | ) | (22,430,428 | ) | — | |||||||||
| Net cash provided by (used in) operating activities |
11,842,418 | 23,762,341 | 81,289,908 | 6,551,136 | ||||||||||||
| Cash Flows from Financing Activities |
||||||||||||||||
| Increase (Decrease) in cash overdraft |
— | (1,261,304 | ) | — | 26,255 | |||||||||||
| Net proceeds from reverse repurchase agreements |
125,000,000 | — | — | — | ||||||||||||
| Repayment of borrowings |
(103,000,000 | ) | — | — | — | |||||||||||
| Cash distributions paid to common shareholders |
(40,310,399 | ) | (19,323,756 | ) | (75,706,574 | ) | (5,090,984 | ) | ||||||||
| Net cash provided by (used in) financing activities |
(18,310,399 | ) | (20,585,060 | ) | (75,706,574 | ) | (5,064,729 | ) | ||||||||
| Net Increase (Decrease) in Cash |
(6,467,981 | ) | 3,177,281 | 5,583,334 | 1,486,407 | |||||||||||
| Cash at the beginning of period |
6,518,979 | — | — | — | ||||||||||||
| Cash at the end of period |
$ | 50,998 | $ | 3,177,281 | $ | 5,583,334 | $ | 1,486,407 | ||||||||
| Supplemental Disclosure of Cash Flow Information | ||||||||||||||||
| Cash paid for interest (excluding borrowing costs) |
$ | 4,992,092 | $ | 2,541,759 | $ | 9,126,805 | $ | 444,241 | ||||||||
| Non-cash financing activities not included herein consists of reinvestments of common share distributions |
— | — | 109,881 | 123,729 | ||||||||||||
See accompanying notes to financial statements.
| 56 | NUVEEN |
THIS PAGE INTENTIONALLY LEFT BLANK
| NUVEEN | 57 |
Highlights (Unaudited)
Selected data for a common share outstanding throughout each period:
| Investment Operations |
Less Distributions to Common Shareholders |
Common Share | ||||||||||||||||||||||||||||||||||||||||||
| Beginning Common Share NAV |
Net Investment Income (Loss)(a) |
Net Realized/ Unrealized Gain (Loss) |
Total | From Net Investment Income |
From Accumulated Net Realized Gains |
Return of Capital |
Total | Discount per Share Repurchased and Retired |
Ending NAV |
Ending Share Price |
||||||||||||||||||||||||||||||||||
| JPC |
|
|||||||||||||||||||||||||||||||||||||||||||
| Year Ended 7/31: |
|
|||||||||||||||||||||||||||||||||||||||||||
| 2018(g) |
$ | 10.87 | $ | 0.41 | $ | (0.23 | ) | $ | 0.18 | $ | (0.39 | ) | $ | — | $ | — | $ | (0.39 | ) | $ | — | $ | 10.66 | $ | 9.81 | |||||||||||||||||||
| 2017 |
10.53 | 0.72 | 0.40 | 1.12 | (0.77 | ) | — | (0.01 | ) | (0.78 | ) | — | 10.87 | 10.59 | ||||||||||||||||||||||||||||||
| 2016 |
10.45 | 0.77 | 0.11 | 0.88 | (0.80 | ) | — | — | (0.80 | ) | — | 10.53 | 10.43 | |||||||||||||||||||||||||||||||
| 2015 |
10.67 | 0.80 | (0.25 | ) | 0.55 | (0.77 | ) | — | — | (0.77 | ) | — | * | 10.45 | 9.19 | |||||||||||||||||||||||||||||
| 2014 |
10.26 | 0.79 | 0.38 | 1.17 | (0.76 | ) | — | — | (0.76 | ) | — | * | 10.67 | 9.34 | ||||||||||||||||||||||||||||||
| 2013(e) |
10.28 | 0.46 | (0.04 | ) | 0.42 | (0.44 | ) | — | — | (0.44 | ) | — | 10.26 | 9.35 | ||||||||||||||||||||||||||||||
| Year Ended 12/31: |
|
|||||||||||||||||||||||||||||||||||||||||||
| 2012 |
8.67 | 0.76 | 1.61 | 2.37 | (0.76 | ) | — | — | (0.76 | ) | — | 10.28 | 9.71 | |||||||||||||||||||||||||||||||
| JPI |
| |||||||||||||||||||||||||||||||||||||||||||
| Year Ended 7/31: |
| |||||||||||||||||||||||||||||||||||||||||||
| 2018(g) |
25.97 | 0.84 | (0.18 | ) | 0.66 | (0.85 | ) | — | — | (0.85 | ) | — | 25.78 | 23.88 | ||||||||||||||||||||||||||||||
| 2017 |
24.60 | 1.75 | 1.46 | 3.21 | (1.77 | ) | — | (0.07 | ) | (1.84 | ) | — | 25.97 | 25.15 | ||||||||||||||||||||||||||||||
| 2016 |
24.88 | 1.86 | (0.01 | ) | 1.85 | (1.95 | ) | (0.18 | ) | — | (2.13 | ) | — | 24.60 | 24.59 | |||||||||||||||||||||||||||||
| 2015 |
25.51 | 1.96 | (0.65 | ) | 1.31 | (1.94 | ) | — | — | (1.94 | ) | — | 24.88 | 22.28 | ||||||||||||||||||||||||||||||
| 2014 |
25.06 | 1.98 | 0.93 | 2.91 | (1.97 | ) | (0.49 | ) | — | (2.46 | ) | — | 25.51 | 23.11 | ||||||||||||||||||||||||||||||
| 2013 |
23.81 | 1.89 | 1.32 | 3.21 | (1.86 | ) | (0.10 | ) | — | (1.96 | ) | — | * | 25.06 | 23.68 | |||||||||||||||||||||||||||||
| Borrowings at the End of Period | ||||||||
| Aggregate Amount Outstanding (000) |
Asset Coverage Per $1,000 |
|||||||
| JPC |
||||||||
| Year Ended 7/31: |
| |||||||
| 2018(g) |
$ | 437,000 | $ | 3,520 | ||||
| 2017 |
540,000 | 3,079 | ||||||
| 2016 |
404,100 | 3,526 | ||||||
| 2015 |
404,100 | 3,506 | ||||||
| 2014 |
402,500 | 3,572 | ||||||
| 2013(e) |
402,500 | 3,473 | ||||||
| Year Ended 12/31: |
| |||||||
| 2012 |
383,750 | 3,599 | ||||||
| JPI |
||||||||
| Year Ended 7/31: |
| |||||||
| 2018(g) |
225,000 | 3,607 | ||||||
| 2017 |
225,000 | 3,627 | ||||||
| 2016 |
225,000 | 3,488 | ||||||
| 2015 |
225,000 | 3,516 | ||||||
| 2014 |
225,000 | 3,580 | ||||||
| 2013 |
225,000 | 3,535 | ||||||
| (a) | Per share Net Investment Income (Loss) is calculated using the average daily shares method. |
| (b) | Total Return Based on Common Share NAV is the combination of changes in common share NAV, reinvested dividend income at NAV and reinvested capital gains distributions at NAV, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending NAV. The actual reinvest price for the last dividend declared in the period may often be based on the Fund’s market price (and not its NAV), and therefore may be different from the price used in the calculation. Total returns are not annualized. |
| Total Return Based on Common Share Price is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized. |
| 58 | NUVEEN |
| Common Share Supplemental Data/ Ratios Applicable to Common Shares |
||||||||||||||||||||||
| Common Share Total Returns |
Ratios to Average Net Asset(c) | |||||||||||||||||||||
| Based on NAV(b) |
Based on Share Price(b) |
Ending Net Assets (000) |
Expenses | Net Investment Income (Loss) |
Portfolio Turnover Rate(d) |
|||||||||||||||||
| 1.68 | % | (3.82 | )% | $ | 1,101,228 | 2.43 | %** | 7.55 | %** | 9 | % | |||||||||||
| 11.16 | 9.73 | 1,122,751 | 1.92 | 6.82 | 32 | |||||||||||||||||
| 9.01 | 23.47 | 1,020,717 | 1.73 | 7.58 | 17 | |||||||||||||||||
| 5.36 | 6.76 | 1,012,766 | 1.63 | 7.55 | 44 | |||||||||||||||||
| 11.97 | 8.50 | 1,035,146 | 1.67 | 7.73 | 41 | |||||||||||||||||
| 4.09 | 0.63 | 995,460 | 1.67 | ** | 7.47 | ** | 27 | |||||||||||||||
| 28.17 | 31.44 | 997,484 | 1.79 | 7.85 | 123 | |||||||||||||||||
| 2.56 | (1.75 | ) | 586,677 | 2.08 | ** | 6.42 | ** | 11 | ||||||||||||||
| 13.62 | 10.29 | 591,018 | 1.93 | 7.04 | 19 | |||||||||||||||||
| 7.96 | 20.97 | 559,722 | 1.77 | 7.73 | 23 | |||||||||||||||||
| 5.30 | 4.83 | 566,137 | 1.66 | 7.80 | 26 | |||||||||||||||||
| 12.34 | 8.71 | 580,516 | 1.73 | 7.96 | 37 | |||||||||||||||||
| 13.69 | 0.41 | 570,298 | 1.72 | 7.51 | 57 | |||||||||||||||||
| (c) • | Net Investment Income (Loss) ratios reflect income earned and expenses incurred on assets attributable to borrowings and/or reverse repurchase agreements (as described in Note 8 – Fund Leverage). |
| • | Each ratio includes the effect of all interest expense paid and other costs related to borrowings and/or reverse repurchase agreements, where applicable, as follows: |
| JPC |
Ratios of Interest Expense |
|||
| Year Ended 7/31: |
| |||
| 2018(g) |
1.12 | %** | ||
| 2017 |
0.70 | |||
| 2016 |
0.50 | |||
| 2015 |
0.41 | |||
| 2014 |
0.43 | |||
| 2013(e) |
0.45 | ** | ||
| Year Ended 12/31: |
| |||
| 2012 |
0.52 | |||
| JPI |
||||
| Year Ended 7/31: |
| |||
| 2018(g) |
0.85 | ** | ||
| 2017 |
0.67 | |||
| 2016 |
0.50 | |||
| 2015 |
0.41 | |||
| 2014 |
0.45 | |||
| 2013(f) |
0.48 | ** | ||
| (d) | Portfolio Turnover Rate is calculated based on the lesser of long-term purchases or sales (as disclosed in Note 5 – Investment Transactions) divided by the average long-term market value during the period. |
| (e) | For the seven months ended July 31, 2013. |
| (f) | For the period August 29, 2012 (first utilization date of borrowings) through July 31, 2013. |
| (g) | For the six months ended January 31, 2018. |
| * | Rounds to less than $0.01 per share. |
| ** | Annualized. |
See accompanying notes to financial statements.
| NUVEEN | 59 |
Financial Highlights (Unaudited) (continued)
Selected data for a common share outstanding throughout each period:
| Investment Operations | Less Distributions to Common Shareholders |
Common Share | ||||||||||||||||||||||||||||||||||||||||||||||
| Beginning Common Share NAV |
Net Investment Income (Loss)(a) |
Net Realized/ Unrealized Gain (Loss) |
Total | From Net Investment Income |
From Accumulated Net Realized Gains |
Return of Capital |
Total | Discount per Share |
Offering Costs |
Ending NAV |
Ending Share Price |
|||||||||||||||||||||||||||||||||||||
| JPS |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended 7/31: |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 2018(h) |
$ | 10.39 | $ | 0.35 | $ | (0.05 | ) | $ | 0.30 | $ | (0.37 | ) | $ | — | $ | — | $ | (0.37 | ) | $ | — | $ | — | $ | 10.32 | $ | 9.44 | |||||||||||||||||||||
| 2017 |
9.67 | 0.71 | 0.75 | 1.46 | (0.74 | ) | — | — | (0.74 | ) | — | — | 10.39 | 10.30 | ||||||||||||||||||||||||||||||||||
| 2016 |
9.75 | 0.69 | (0.07 | ) | 0.62 | (0.70 | ) | — | — | (0.70 | ) | — | — | 9.67 | 9.63 | |||||||||||||||||||||||||||||||||
| 2015 |
9.95 | 0.68 | (0.15 | ) | 0.53 | (0.73 | ) | — | — | (0.73 | ) | — | — | 9.75 | 9.08 | |||||||||||||||||||||||||||||||||
| 2014 |
9.45 | 0.69 | 0.47 | 1.16 | (0.66 | ) | — | — | (0.66 | ) | — | — | 9.95 | 8.92 | ||||||||||||||||||||||||||||||||||
| 2013 |
9.12 | 0.69 | 0.30 | 0.99 | (0.66 | ) | — | — | (0.66 | ) | — | — | 9.45 | 8.47 | ||||||||||||||||||||||||||||||||||
| JPT |
||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended 7/31: |
| |||||||||||||||||||||||||||||||||||||||||||||||
| 2018(h) |
25.62 | 0.73 | (0.69 | ) | 0.04 | (0.77 | ) | — | — | (0.77 | ) | — | — | 24.89 | 23.58 | |||||||||||||||||||||||||||||||||
| 2017(e) |
24.63 | 0.74 | 0.94 | 1.68 | (0.64 | ) | — | — | (0.64 | ) | — | (0.05 | ) | 25.62 | 25.24 | |||||||||||||||||||||||||||||||||
| Borrowings at End of Period | ||||||||
| Aggregate Amount Outstanding (000) |
Asset Coverage Per $1,000 |
|||||||
| JPS |
||||||||
| Year Ended 7/31: |
||||||||
| 2018(h) |
$ | 845,300 | $ | 3,487 | ||||
| 2017 |
845,300 | 3,506 | ||||||
| 2016 |
945,000 | 3,086 | ||||||
| 2015 |
465,800 | 3,521 | ||||||
| 2014 |
464,000 | 3,581 | ||||||
| 2013 |
464,000 | 3,451 | ||||||
| JPT |
||||||||
| Year Ended 7/31: |
||||||||
| 2018(h) |
42,500 | 4,999 | ||||||
| 2017(e) |
42,500 | 5,113 | ||||||
| (a) | Per share Net Investment Income (Loss) is calculated using the average daily shares method. |
| (b) | Total Return Based on Common Share NAV is the combination of changes in common share NAV, reinvested dividend income at NAV and reinvested capital gains distributions at NAV, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending NAV. The actual reinvest price for the last dividend declared in the period may often be based on the Fund’s market price (and not its NAV), and therefore may be different from the price used in the calculation. Total returns are not annualized. |
| Total Return Based on Common Share Price is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized. |
| 60 | NUVEEN |
| Common Share Supplemental Data/ Ratios Applicable to Common Shares |
||||||||||||||||||||||||||||||
| Common Share Total Returns |
Ratios to Average Net Assets Before Reimbursement(c) |
Ratios to Average Net Assets After Reimbursement(c)(d) |
||||||||||||||||||||||||||||
| Based on NAV(b) |
Based on Share Price(b) |
Ending Net Assets (000) |
Expenses | Net Investment Income (Loss) |
Expenses | Net Investment Income (Loss) |
Portfolio Turnover Rate(f) |
|||||||||||||||||||||||
| 2.94 | % | (4.93 | )% | $ | 2,102,467 | 2.31 | %* | 6.77 | %* | N/A | N/A | 3 | % | |||||||||||||||||
| 15.83 | 15.50 | 2,118,545 | 2.03 | 7.18 | N/A | N/A | 13 | |||||||||||||||||||||||
| 6.77 | 14.48 | 1,970,819 | 1.84 | 7.31 | N/A | N/A | 36 | |||||||||||||||||||||||
| 5.47 | 10.35 | 1,174,259 | 1.64 | 6.92 | 1.64 | (g) | 6.92 | (g) | 8 | |||||||||||||||||||||
| 12.83 | 13.76 | 1,197,726 | 1.69 | 7.32 | N/A | N/A | 16 | |||||||||||||||||||||||
| 10.98 | (2.63 | ) | 1,137,303 | 1.71 | 7.23 | N/A | N/A | 32 | ||||||||||||||||||||||
| 0.13 | (3.68 | ) | 169,958 | 1.69 | * | 5.72 | * | N/A | N/A | 14 | ||||||||||||||||||||
| 6.69 | 3.54 | 174,791 | 1.61 | * | 5.73 | * | N/A | N/A | 22 | |||||||||||||||||||||
| (c) • | Net Investment Income (Loss) ratios reflect income earned and expenses incurred on assets attributable to borrowings and/or reverse repurchase agreements (as described in Note 8 – Fund Leverage), where applicable. |
| • | Each ratio includes the effect of all interest expense paid and other costs related to borrowings and/or reverse repurchase agreements, where applicable, as follows: |
| JPS | Ratios of Interest Expense to Average Net Assets Applicable to Common Shares |
|||
| Year Ended 7/31: |
| |||
| 2018(h) |
1.05 | %* | ||
| 2017 |
0.77 | |||
| 2016 |
0.50 | |||
| 2015 |
0.40 | |||
| 2014 |
0.43 | |||
| 2013 |
0.47 | |||
| JPT |
||||
| Year Ended 7/31: |
| |||
| 2018(h) |
0.53 | * | ||
| 2017(e) |
0.42 | * | ||
| (d) | After expense reimbursement from the Adviser, where applicable. |
| (e) | For the period January 26, 2017 (commencement of operations) through July 31, 2017. |
| (f) | Portfolio Turnover Rate is calculated based on the lesser of long-term purchases or sales (as disclosed in Note 5 – Investment Transactions) divided by the average long-term market value during the period. |
| (g) | During the fiscal year ended July 31, 2015, the Adviser voluntarily reimbursed the Fund for certain expenses incurred in connection with a common share equity shelf program. As a result, the Expenses and Net Investment Income (Loss) Ratios to Average Net Assets Applicable to Common Shares reflect this voluntary expense reimbursement from Adviser. |
| (h) | For the six months ended January 31, 2018. |
| * | Annualized. |
| N/A | The Fund does not have or no longer has a contractual reimbursement agreement with the Adviser. |
See accompanying notes to financial statements.
| NUVEEN | 61 |
Financial Statements (Unaudited)
1. General Information and Significant Accounting Policies
General Information
Fund Information
The funds covered in this report and their corresponding New York Stock Exchange (“NYSE”) symbols are as follows (each a “Fund” and collectively, the “Funds”):
| • | Nuveen Preferred and Income Opportunities Fund (JPC) |
| • | Nuveen Preferred and Income Term Fund (JPI) |
| • | Nuveen Preferred and Income Securities Fund (JPS) |
| • | Nuveen Preferred and Income 2022 Term Fund (JPT) |
The Funds are registered under the Investment Company Act of 1940, as amended, as diversified (non-diversified for JPT), closed-end management investment companies. JPC, JPI, JPS and JPT were each organized as Massachusetts business trusts on January 27, 2003, April 18, 2012, June 24, 2002 and July 6, 2016, respectively.
The end of the reporting period for the Funds is January 31, 2018, and the period covered by these Notes to Financial Statements is the six months ended January 31, 2018 (the “current fiscal period”).
Effective September 29, 2017, JPC changed its name from Nuveen Preferred Income Opportunities Fund to the Nuveen Preferred and Income Opportunities Fund and JPS changed its name from Nuveen Preferred Securities Income Fund to the Nuveen Preferred and Income Securities Fund.
Investment Adviser
The Funds’ investment adviser is Nuveen Fund Advisors, LLC (the “Adviser”), a subsidiary of Nuveen, LLC (“Nuveen”). Nuveen is the investment management arm of Teachers Insurance and Annuity Association of America (TIAA). The Adviser has overall responsibility for management of the Funds, oversees the management of the Funds’ portfolios, manages the Funds’ business affairs and provides certain clerical, bookkeeping and other administrative services, and, if necessary, asset allocation decisions. The Adviser has entered into sub-advisory agreements with NWQ Investment Management Company, LLC (“NWQ”), an affiliate of Nuveen, Spectrum Asset Management, Inc. (“Spectrum”), and/or Nuveen Asset Management LLC (“NAM”), a subsidiary of the Adviser, (each a “Sub-Adviser” and collectively, the “Sub-Advisers”). NWQ and NAM are each responsible for approximately half of JPC’s portfolio. NAM manages the investment portfolio of JPI and JPT, while Spectrum manages the investment portfolio of JPS. The Adviser is responsible for managing JPC’s, JPI’s and JPS’s investments in swap contracts.
Investment Objectives and Principal Investment Strategies
JPC’s investment objective is to provide high current income and total return. For the period August 1, 2017 through September 28, 2017, the Fund invested at least 80% of its managed assets (as defined in Note 7 – Management Fees and Other Transactions with Affiliates) in preferred securities, and up to 20% opportunistically over the market cycle in other types of securities, primarily income-oriented securities such as corporate and taxable municipal debt and common equity. Effective September 29, 2017, the Fund invests at least 80% of the sum of its net assets and the amount of any borrowings for investment purposes in preferred and other income producing securities, including hybrid securities such as contingent capital securities and up to 20% opportunistically in other income-oriented securities such as corporate and taxable municipal debt and dividend paying common equity. At least 50% of its managed assets are rated investment grade (BBB/Baa or better by S&P, Moody’s, or Fitch) at the time of investment.
JPI’s investment objective is to provide a high level of current income and total return by investing at least 80% of its managed assets in preferred and other income producing securities. At least 50% of its managed assets are rated investment grade (BBB/Baa or better by one of the nationally recognized statistical rating organizations “NRSROs”) at the time of investment.
JPS’s investment objective is high current income consistent with capital preservation. The Fund’s secondary investment objective is to enhance portfolio value. For the period August 1, 2017 through September 28, 2017, the Fund invested at least 80% of its managed assets in preferred securities and up to 20% of its managed assets in debt securities, including convertible debt securities and convertible preferred securities. Effective September 29, 2017, the Fund invests at least 80% of the sum of its net assets and the amount of any borrowings for investment purposes in preferred and other income producing securities, including hybrid securities such as contingent capital securities. The Fund invests at least 50% of its managed assets are rated investment grade (BBB/Baa or better by S&P, Moody’s, or Fitch) at the time of investment.
| 62 | NUVEEN |
JPT’s investment objective is to provide a high level of current income and total return by investing at least 80% of its managed assets in preferred and other income-producing securities. The Fund may invest without limit in investment grade securities (BB+/Ba1 or lower) but no more than 10% in securities rated below B-/B3 at the time of investment. Up to 40% of its managed assets may be in securities issued by companies located anywhere in the world, but no more than 10% in securities of issuers in emerging market countries, and 100% in U.S. dollar-denominated securities. The Fund does not invest in contingent capital securities (“CoCos”).
Significant Accounting Policies
Each Fund is an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (ASC) Topic 946 “Financial Services – Investment Companies.” The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and losses from investment transactions are determined on the specific identification method, which is the same basis used for federal income tax purposes. Investments purchased on a when-issued/delayed delivery basis may have extended settlement periods. Any investments so purchased are subject to market fluctuation during this period. The Funds have earmarked securities in their portfolios with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments.
As of the end of the reporting period, the Funds did not have any outstanding when-issued/delayed delivery purchase commitments.
Investment Income
Dividend income is recorded on the ex-dividend date or, for foreign securities, when information is available. Non-cash dividends received in the form of stock, if any, are recognized on the ex-dividend date and recorded at fair value. Interest income, which reflects the amortization of premiums and includes accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Interest income also reflects payment-in-kind (“PIK”) interest and paydown gains and losses, if any. PIK interest represents income received in the form of securities in lieu of cash. Other income is comprised of fees earned in connection with the rehypothecation of pledged collateral as further described in Note 8 – Fund Leverage, Rehypothecation.
Professional Fees
Professional fees presented on the Statement of Operations consist of legal fees incurred in the normal course of operations, audit fees, tax consulting fees and, in some cases, workout expenditures. Workout expenditures are incurred in an attempt to protect or enhance an investment or to pursue other claims or legal actions on behalf of Fund shareholders. If a refund is received for workout expenditures paid in a prior reporting period, such amounts will be recognized as “Legal fee refund” on the Statement of Operations.
Dividends and Distributions to Common Shareholders
Dividends to common shareholders, if any, are declared monthly. Net realized capital gains from investment transactions, if any, are declared and distributed to shareholders at least annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards.
Distributions to common shareholders are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP.
Compensation
The Funds pay no compensation directly to those of its trustees who are affiliated with the Adviser or to its officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. The Funds’ Board of Trustees (the ‘‘Board’’) has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen-advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised funds.
Indemnifications
Under the Funds’ organizational documents, their officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.
Netting Agreements
In the ordinary course of business, the Funds may enter into transactions subject to enforceable master repurchase agreements, International Swaps and Derivatives Association, Inc. (ISDA) master agreements or other similar arrangements (“netting agreements”). Generally, the right to offset in netting
| NUVEEN | 63 |
Notes to Financial Statements (Unaudited) (continued)
agreements allows each Fund to offset certain securities and derivatives with a specific counterparty, when applicable, as well as any collateral received or delivered to that counterparty based on the terms of the agreements. Generally, each Fund manages its cash collateral and securities collateral on a counterparty basis.
The Funds’ investments subject to netting agreements as of the end of the reporting period, if any, are further described in Note 3 – Portfolio Securities and Investments in Derivatives.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to common shares from operations during the current fiscal period. Actual results may differ from those estimates.
2. Investment Valuation and Fair Value Measurements
The fair valuation input levels as described below are for fair value measurement purposes.
Fair value is defined as the price that would be received upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The following is a summary of the three-tiered hierarchy of valuation input levels.
| Level 1 – | Inputs are unadjusted and prices are determined using quoted prices in active markets for identical securities. | |
| Level 2 – | Prices are determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). | |
| Level 3 – | Prices are determined using significant unobservable inputs (including management’s assumptions in determining the fair value of investments). |
Common stocks and other equity-type securities are valued at the last sales price on the securities exchange on which such securities are primarily traded and are generally classified as Level 1. Securities primarily traded on the NASDAQ National Market (“NASDAQ”) are valued at the NASDAQ Official Closing Price and are generally classified as Level 1. However, securities traded on a securities exchange or NASDAQ for which there were no transactions on a given day or securities not listed on a securities exchange or NASDAQ are valued at the quoted bid price and are generally classified as Level 2. Prices of certain American Depositary Receipts (“ADR”) held by the Funds that trade in the United States are valued based on the last traded price, official closing price or the most recent bid price of the underlying non- U.S.-traded stock, adjusted as appropriate for the underlying-to-ADR conversion ratio and foreign exchange rate, and from time-to-time may also be adjusted further to take into account material events that may take place after the close of the local non-U.S. market but before the close of the NYSE, which may represent a transfer from a Level 1 to a Level 2 security.
Prices of fixed-income securities are provided by an independent pricing service (“pricing service”) approved by the Board. The pricing service establishes a security’s fair value using methods that may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. These securities are generally classified as Level 2. In pricing certain securities, particularly less liquid and lower quality securities, the pricing service may consider information about a security, its issuer or market activity, provided by the Adviser. These securities are generally classified as Level 2 or Level 3 depending on the observability of the significant inputs.
Prices of swap contracts are also provided by a pricing service approved by the Board using the same methods as described above, and are generally classified as Level 2.
Investments in investment companies are valued at their respective NAVs on valuation date and are generally classified as Level 1.
Futures contracts are valued using the closing settlement price or, in the absence of such a price, the last traded price and are generally classified as Level 1.
Repurchase agreements are valued at contract amount plus accrued interest, which approximates market value. These securities are generally classified as Level 2.
Investments initially valued in currencies other than the U.S. dollar are converted to the U.S. dollar using exchange rates obtained from pricing services. As a result, the NAV of the Funds’ shares may be affected by changes in the value of currencies in relation to the U.S. dollar. The value of securities traded in markets outside the United States or denominated in currencies other than the U.S. dollar may be affected significantly on a day that the NYSE is closed
| 64 | NUVEEN |
and an investor is not able to purchase, redeem or exchange shares. If significant market events occur between the time of determination of the closing price of a foreign security on an exchange and the time that the Funds’ NAV is determined, or if under the Funds’ procedures, the closing price of a foreign security is not deemed to be reliable, the security would be valued at fair value as determined in accordance with procedures established in good faith by the Board. These securities are generally classified as Level 2 or Level 3 depending on the observability of the significant inputs.
Certain securities may not be able to be priced by the pre-established pricing methods as described above. Such securities may be valued by the Board and/or its appointee at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933, as amended) for which a pricing service is unable to provide a market price; securities whose trading has been formally suspended; debt securities that have gone into default and for which there is no current market quotation; a security whose market price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of a Fund’s NAV (as may be the case in non-U.S. markets on which the security is primarily traded) or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the pricing service, is not deemed to reflect the security’s fair value. As a general principle, the fair value of a security would appear to be the amount that the owner might reasonably expect to receive for it in a current sale. A variety of factors may be considered in determining the fair value of such securities, which may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. These securities are generally classified as Level 2 or Level 3 depending on the observability of the significant inputs. Regardless of the method employed to value a particular security, all valuations are subject to review by the Board and/or its appointee.
The inputs or methodologies used for valuing securities are not an indication of the risks associated with investing in those securities. The following is a summary of each Fund’s fair value measurements as of the end of the reporting period:
| JPC | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Long-Term Investments*: |
||||||||||||||||
| $1,000 Par (or similar) Institutional Preferred |
$ | — | $ | 755,442,317 | $ | — | $ | 755,442,317 | ||||||||
| $25 Par (or similar) Retail Preferred |
402,482,394 | 77,218,412 | ** | — | 479,700,806 | |||||||||||
| Contingent Capital Securities |
— | 266,236,885 | — | 266,236,885 | ||||||||||||
| Corporate Bonds |
— | 110,797,014 | — | 110,797,014 | ||||||||||||
| Convertible Preferred Securities |
11,857,416 | — | — | 11,857,416 | ||||||||||||
| Common Stocks |
2,935,358 | — | — | 2,935,358 | ||||||||||||
| Short-Term Investments: |
||||||||||||||||
| Repurchase Agreements |
— | 21,717,039 | — | 21,717,039 | ||||||||||||
| Investments in Derivatives: |
||||||||||||||||
| Interest Rate Swaps*** |
— | 9,697,121 | — | 9,697,121 | ||||||||||||
| Total |
$ | 417,275,168 | $ | 1,241,108,788 | $ | — | $ | 1,658,383,956 | ||||||||
| JPI | ||||||||||||||||
| Long-Term Investments*: |
||||||||||||||||
| $1,000 Par (or similar) Institutional Preferred |
$ | — | $ | 374,252,653 | $ | — | $ | 374,252,653 | ||||||||
| Contingent Capital Securities |
— | 237,208,790 | — | 237,208,790 | ||||||||||||
| $25 Par (or similar) Retail Preferred |
124,169,676 | 64,014,779 | ** | — | 188,184,455 | |||||||||||
| Corporate Bonds |
— | 2,042,738 | — | 2,042,738 | ||||||||||||
| Short-Term Investments: |
||||||||||||||||
| Repurchase Agreements |
— | 2,594,925 | — | 2,594,925 | ||||||||||||
| Investments in Derivatives: |
||||||||||||||||
| Interest Rate Swaps*** |
— | 2,883,388 | — | 2,883,388 | ||||||||||||
| Total |
$ | 124,169,676 | $ | 682,997,273 | $ | — | $ | 807,166,949 | ||||||||
| NUVEEN | 65 |
Notes to Financial Statements (Unaudited) (continued)
| JPS | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Long-Term Investments*: |
||||||||||||||||
| $1,000 Par (or similar) Institutional Preferred |
$ | — | $ | 1,468,947,590 | $ | — | $ | 1,468,947,590 | ||||||||
| Contingent Capital Securities |
— | 1,172,420,481 | — | 1,172,420,481 | ||||||||||||
| $25 Par (or similar) Retail Preferred |
264,800,405 | 63,521,743 | ** | — | 328,322,148 | |||||||||||
| Investment Companies |
23,939,292 | — | — | 23,939,292 | ||||||||||||
| Corporate Bonds |
— | 17,489,148 | — | 17,489,148 | ||||||||||||
| Convertible Preferred Securities |
16,256,000 | — | — | 16,256,000 | ||||||||||||
| Short-Term Investments: |
||||||||||||||||
| Repurchase Agreements |
— | 69,723,169 | — | 69,723,169 | ||||||||||||
| Investments in Derivatives: |
||||||||||||||||
| Interest Rate Swaps*** |
— | 18,206,126 | — | 18,206,126 | ||||||||||||
| Total |
$ | 304,995,697 | $ | 2,810,308,257 | $ | — | $ | 3,115,303,954 | ||||||||
| JPT | ||||||||||||||||
| Long-Term Investments*: |
||||||||||||||||
| $1,000 Par (or similar) Institutional Preferred |
$ | — | $ | 165,637,837 | $ | — | $ | 165,637,837 | ||||||||
| $25 Par (or similar) Retail Preferred |
40,022,142 | 3,821,370 | ** | — | 43,843,512 | |||||||||||
| Short-Term Investments: |
||||||||||||||||
| Repurchase Agreements |
— | 2,079,568 | — | 2,079,568 | ||||||||||||
| Investments in Derivatives: |
||||||||||||||||
| Futures Contracts*** |
43,299 | — | — | 43,299 | ||||||||||||
| Total |
$ | 40,065,441 | $ | 171,538,775 | $ | — | $ | 211,604,216 | ||||||||
| * | Refer to the Fund’s Portfolio of Investments for industry classifications, when applicable. |
| ** | Refer to the Fund’s Portfolio of Investments for securities classified as Level 2. |
| *** | Represents net unrealized appreciation (depreciation) as reported in the Fund’s Portfolio of Investments. |
The Board is responsible for the valuation process and has appointed the oversight of the daily valuation process to the Adviser’s Valuation Committee. The Valuation Committee, pursuant to the valuation policies and procedures adopted by the Board, is responsible for making fair value determinations, evaluating the effectiveness of the Funds’ pricing policies and reporting to the Board. The Valuation Committee is aided in its efforts by the Adviser’s dedicated Securities Valuation Team, which is responsible for administering the daily valuation process and applying fair value methodologies as approved by the Valuation Committee. When determining the reliability of independent pricing services for investments owned by the Funds, the Valuation Committee, among other things, conducts due diligence reviews of the pricing services and monitors the quality of security prices received through various testing reports conducted by the Securities Valuation Team.
The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making a fair value determination, based on the facts and circumstances specific to the portfolio instrument. Fair value determinations generally will be derived as follows, using public or private market information:
| (i) | If available, fair value determinations shall be derived by extrapolating from recent transactions or quoted prices for identical or comparable securities. |
| (ii) | If such information is not available, an analytical valuation methodology may be used based on other available information including, but not limited to: analyst appraisals, research reports, corporate action information, issuer financial statements and shelf registration statements. Such analytical valuation methodologies may include, but are not limited to: multiple of earnings, discount from market value of a similar freely-traded security, discounted cash flow analysis, book value or a multiple thereof, risk premium/yield analysis, yield to maturity and/or fundamental investment analysis. |
The purchase price of a portfolio instrument will be used to fair value the instrument only if no other valuation methodology is available or deemed appropriate, and it is determined that the purchase price fairly reflects the instrument’s current value.
For each portfolio security that has been fair valued pursuant to the policies adopted by the Board, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such testing and fair valuation occurrences are reported to the Board.
3. Portfolio Securities and Investments in Derivatives
Portfolio Securities
Foreign Currency Transactions
To the extent that a Fund may invest in securities and/or contracts that are denominated in a currency other than U.S. dollars, the Fund will be subject to currency risk, which is the risk that an increase in the U.S. dollar relative to the foreign currency will reduce returns or portfolio value. Generally, when the U.S. dollar rises in value against a foreign currency, the Fund’s investments denominated in that currency will lose value because its currency is worth
| 66 | NUVEEN |
fewer U.S. dollars; the opposite effect occurs if the U.S. dollar falls in relative value. Investments and other assets and liabilities denominated in foreign currencies are converted into U.S. dollars on a spot (i.e. cash) basis at the spot rate prevailing in the foreign currency exchange market at the time of valuation. Purchases and sales of investments and income denominated in foreign currencies are translated into U.S. dollars on the respective dates of such transactions.
As of the end of the reporting period, the Funds’ investments in non-U.S. securities were as follows:
| JPC | Value | % of Total Investments |
||||||
| Country: |
||||||||
| United Kingdom |
$ | 152,830,978 | 9.3 | % | ||||
| France |
70,083,116 | 4.3 | ||||||
| Italy |
50,165,488 | 3.0 | ||||||
| Canada |
43,407,519 | 2.6 | ||||||
| Switzerland |
33,601,641 | 2.0 | ||||||
| Other |
109,656,772 | 6.7 | ||||||
| Total non-U.S. securities |
$ | 459,745,514 | 27.9 | % | ||||
| JPI | ||||||||
| Country: |
||||||||
| United Kingdom |
$ | 102,575,504 | 12.8 | % | ||||
| France |
60,747,267 | 7.6 | ||||||
| Italy |
43,929,253 | 5.5 | ||||||
| Switzerland |
30,024,664 | 3.7 | ||||||
| Australia |
27,711,468 | 3.4 | ||||||
| Other |
82,352,298 | 10.2 | ||||||
| Total non-U.S. securities |
$ | 347,340,454 | 43.2 | % | ||||
| JPS | ||||||||
| Country: |
||||||||
| United Kingdom |
$ | 565,990,916 | 18.3 | % | ||||
| France |
338,708,389 | 10.9 | ||||||
| Switzerland |
215,136,415 | 6.9 | ||||||
| Sweden |
104,784,153 | 3.4 | ||||||
| Other |
388,372,448 | 12.6 | ||||||
| Total non-U.S. securities |
$ | 1,612,992,321 | 52.1 | % | ||||
| JPT | ||||||||
| Country: |
||||||||
| United Kingdom |
$ | 14,376,360 | 6.8 | % | ||||
| Australia |
11,353,784 | 5.4 | ||||||
| France |
9,202,765 | 4.3 | ||||||
| Canada |
5,650,000 | 2.7 | ||||||
| Other |
15,667,977 | 7.4 | ||||||
| Total non-U.S. securities |
$ | 56,250,886 | 26.6 | % | ||||
The books and records of the Funds are maintained in U.S. dollars. Foreign currencies, assets and liabilities are translated into U.S. dollars at 4:00 p.m. Eastern Time. Investment transactions, income and expenses are translated on the respective dates of such transactions. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date of the transactions, foreign currency transactions and the difference between the amounts of interest and dividends recorded on the books of a Fund and the amounts actually received.
The realized gains and losses resulting from changes in foreign currency exchange rates and changes in foreign exchange rates associated with (i) foreign currency, (ii) investments, (iii) investments in derivatives and (iv) other assets and liabilities are recognized as a component of “Net realized gain (loss) from investments and foreign currency” on the Statement of Operations, when applicable.
The unrealized gains and losses resulting from changes in foreign currency exchange rates and changes in foreign exchange rates associated with (i) investments and (ii) other assets and liabilities are recognized as a component of “Change in net unrealized appreciation (depreciation) of investments and foreign currency” on the Statement of Operations, when applicable. The unrealized gains and losses resulting from changes in foreign exchange rates associated with investments in derivatives are recognized as a component of the respective derivative’s related “Change in net unrealized appreciation (depreciation)” on the Statement of Operations, when applicable.
| NUVEEN | 67 |
Notes to Financial Statements (Unaudited) (continued)
Repurchase Agreements
In connection with transactions in repurchase agreements, it is each Fund’s policy that its custodian take possession of the underlying collateral securities, the fair value of which exceeds the principal amount of the repurchase transaction, including accrued interest, at all times. If the counterparty defaults, and the fair value of the collateral declines, realization of the collateral may be delayed or limited.
The following table presents the repurchase agreements for the Funds that are subject to netting agreements as of the end of the reporting period, and the collateral delivered related to those repurchase agreements.
| Fund | Counterparty | Short-Term Investments, at Value |
Collateral Pledged (From) Counterparty* |
Net Exposure |
||||||||||
| JPC | Fixed Income Clearing Corporation |
$ | 21,717,039 | $ | (21,717,039 | ) | $ | — | ||||||
| JPI | Fixed Income Clearing Corporation |
2,594,925 | (2,594,925 | ) | — | |||||||||
| JPS | Fixed Income Clearing Corporation |
69,723,169 | (69,723,169 | ) | — | |||||||||
| JPT | Fixed Income Clearing Corporation |
2,079,568 | (2,079,568 | ) | — | |||||||||
| * | As of the end of the reporting period, the value of the collateral pledged from the counterparty exceeded the value of the repurchase agreements. Refer to the Fund’s Portfolio of Investments for details on the repurchase agreements. |
Zero Coupon Securities
A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically.
Investments in Derivatives
Each Fund is authorized to invest in certain derivative instruments, such as futures, options and swap contracts. Each Fund limits its investments in futures, options on futures and swap contracts to the extent necessary for the Adviser to claim the exclusion from registration by the Commodity Futures Trading Commission as a commodity pool operator with respect to the Fund. The Funds record derivative instruments at fair value, with changes in fair value recognized on the Statement of Operations, when applicable. Even though the Funds’ investments in derivatives may represent economic hedges, they are not considered to be hedge transactions for financial reporting purposes.
Futures Contracts
Upon execution of a futures contract, a Fund is obligated to deposit cash or eligible securities, also known as ‘‘initial margin,’’ into an account at its clearing broker equal to a specified percentage of the contract amount. Cash held by the broker to cover initial margin requirements on open futures contracts, if any, is recognized as ‘‘Cash collateral at broker for investments in futures contracts’’ on the Statement of Assets and Liabilities. Investments in futures contracts obligate a Fund and the clearing broker to settle monies on a daily basis representing changes in the prior days ‘‘mark-to-market’’ of the open contracts. If a Fund has unrealized appreciation the clearing broker would credit the Fund’s account with an amount equal to appreciation and conversely if a Fund has unrealized depreciation the clearing broker would debit the Fund’s account with an amount equal to depreciation. These daily cash settlements are also known as ‘‘variation margin.’’ Variation margin is recognized as a receivable and/or payable for ‘‘Variation margin on futures contracts’’ on the Statement of Assets and Liabilities.
During the period the futures contract is open, changes in the value of the contract are recognized as an unrealized gain or loss by ‘‘marking-to-market’’ on a daily basis to reflect the changes in market value of the contract, which is recognized as a component of ‘‘Change in net unrealized appreciation (depreciation) of futures contracts’’ on the Statement of Operations. When the contract is closed or expired, a Fund records a realized gain or loss equal to the difference between the value of the contract on the closing date and value of the contract when originally entered into, which is recognized as a component of ‘‘Net realized gain (loss) from futures contracts’’ on the Statement of Operations.
Risks of investments in futures contracts include the possible adverse movement in the price of the securities or indices underlying the contracts, the possibility that there may not be a liquid secondary market for the contracts and/or that a change in the value of the contract may not correlate with a change in the value of the underlying securities or indices.
During the current fiscal period, JPT invested in short interest rate futures to manage the Fund’s exposure to various points along the yield curve, with a net effect of decreasing the Fund’s overall interest rate sensitivity.
| 68 | NUVEEN |
The average notional amount of futures contracts outstanding during the current fiscal period was as follows:
| Average notional amount of futures contracts outstanding* |
$10,817,511 |
| * | The average notional amount is calculated based on the absolute aggregate notional of contracts outstanding at the beginning of the current fiscal period and at the end of each quarter within the current fiscal period. |
The following table presents the fair value of all futures contracts held by JPT as of the end of the reporting period, the location of these instruments on the Statement of Assets and Liabilities and the primary underlying risk exposure.
| Location on the Statement of Assets and Liabilities |
||||||||||||||||||
| Underlying Risk Exposure |
Derivative Instrument |
Asset Derivatives |
(Liability) Derivatives |
|||||||||||||||
| Location | Value | Location | Value | |||||||||||||||
| Interest rate | Futures contracts | Receivable for variation margin on futures contracts* | $ | 43,299 | — | $ | — | |||||||||||
| * | Value represents unrealized appreciation (depreciation) of futures contracts as reported in the Fund’s Portfolio of Investments, and not the asset and/or liability derivative location as described in the table above. |
The following table presents the amount of net realized gain (loss) and change in net unrealized appreciation (depreciation) recognized on futures contracts on the Statement of Operations during the current fiscal period, and the primary underlying risk exposure.
| Underlying Risk Exposure | Derivative Instrument |
Net Realized Gain (Loss) from Futures Contracts |
Change in Net Unrealized Appreciation (Depreciation) of Futures Contracts |
|||||||
| Interest rate |
Futures contracts |
$ | 22,100 | $ | 62,379 | |||||
Interest Rate Swap Contracts
Interest rate swap contracts involve a Fund’s agreement with the counterparty to pay or receive a fixed rate payment in exchange for the counterparty receiving or paying a variable rate payment. Forward interest rate swap contracts involve a Fund’s agreement with a counterparty to pay, in the future, a fixed or variable rate payment in exchange for the counterparty paying the Fund a variable or fixed rate payment, the accruals for which begin at a specified date in the future (the “effective date”).
The amount of the payment obligation for an interest rate swap is based on the notional amount and the termination date of the contract. Interest rate swap contracts do not involve the delivery of securities or other underlying assets or principal. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the net amount of interest payments that the Fund is to receive.
Interest rate swap contracts are valued daily. Upon entering into an interest rate swap contract (and beginning on the effective date for a forward interest rate swap contract), the Fund accrues the fixed rate payment expected to be paid or received and the variable rate payment expected to be received or paid on the interest rate swap contracts on a daily basis, and recognizes the daily change in the fair value of the Fund’s contractual rights and obligations under the contracts. For an OTC swap, that is not cleared through a clearing house (“OTC Uncleared”), the amount recorded on these transactions is recognized on the Statement of Assets and Liabilities as a component of “Unrealized appreciation or depreciation on interest rate swaps.”
Upon the execution of an OTC swap cleared through a clearing house (“OTC Cleared”), the Fund is obligated to deposit cash or eligible securities, also known as “initial margin,” into an account at its clearing broker equal to a specified percentage of the contract amount. Cash deposited by the Fund to cover initial margin requirements on open swap contracts, if any, is recognized as a component of “Cash collateral at brokers for investments in swaps” on the Statement of Assets and Liabilities. Investments in OTC Cleared swaps obligate the Fund and the clearing broker to settle monies on a daily basis representing changes in the prior day’s “mark-to-market” of the swap contract. If the Fund has unrealized appreciation, the clearing broker will credit the Fund’s account with an amount equal to the appreciation. Conversely, if the Fund has unrealized depreciation, the clearing broker will debit the Fund’s account with an amount equal to the depreciation. These daily cash settlements are also known as “variation margin.” Variation margin for OTC Cleared swaps is recognized as a receivable and/or payable for “Variation margin on swap contracts” on the Statement of Assets and Liabilities. Upon the execution of an OTC Uncleared swap, neither the Fund nor the counterparty is required to deposit initial margin as the trades are recorded bilaterally between both parties to the swap contract, and the terms of the variation margin are subject to a predetermined threshold negotiated by the Fund and the counterparty. Variation margin for OTC Uncleared swaps is recognized as a component of “Unrealized appreciation or depreciation on interest rate swaps” as described in the preceding paragraph.
The net amount of periodic payments settled in cash are recognized as a component of “Net realized gain (loss) from swaps” on the Statement of Operations, in addition to the net realized gain or loss recorded upon the termination of the swap contract. For tax purposes, payments expected to be
| NUVEEN | 69 |
Notes to Financial Statements (Unaudited) (continued)
received or paid on the swap contracts are treated as ordinary income or expense, respectively. Changes in the value of the swap contracts during the fiscal period are recognized as a component of “Change in net unrealized appreciation (depreciation) of swaps” on the Statement of Operations. In certain instances, payments are made or received upon entering into the swap contract to compensate for differences between the stated terms of the swap agreements and prevailing market conditions (credit spreads, currency exchange rates, interest rates, and other relevant factors). Payments received or made at the beginning of the measurement period, if any, are recognized as “Interest rate swaps premiums received and/or paid” on the Statement of Assets and Liabilities.
During the current fiscal period, JPC, JPI and JPS continued to utilize forward starting interest rate swap contracts to partially hedge the interest cost of leverage, which as mentioned previously, is through the use of bank borrowings.
The average notional amount of interest rate swap contracts outstanding during the current fiscal period was as follows:
| JPC | JPI | JPS | ||||||||||
| Average notional amount of interest rate swap contracts outstanding* |
$ | 353,697,333 | $ | 168,250,000 | $ | 672,712,667 | ||||||
| * | The average notional amount is calculated based on the outstanding notional at the beginning of the current fiscal period and at the end of each fiscal quarter within the current fiscal period. |
The following table presents the fair value of all swap contracts held by the Funds as of the end of the reporting period, the location of these instruments on the Statement of Assets and Liabilities and the primary underlying risk exposure.
| Location on the Statement of Assets and Liabilities |
||||||||||||||||||
| Underlying Risk Exposure |
Derivative Instrument |
Asset Derivatives |
(Liability) Derivatives |
|||||||||||||||
| Location | Value | Location | Value | |||||||||||||||
| JPC | ||||||||||||||||||
| Interest rate | Swaps (OTC Uncleared) | Unrealized appreciation on interest rate swaps** | $ | 9,697,121 | — |
$ | — | |||||||||||
| JPI | ||||||||||||||||||
| Interest rate | Swaps (OTC Uncleared) | Unrealized appreciation on interest rate swaps** | $ | 2,883,388 | — |
$ | — | |||||||||||
| JPS | ||||||||||||||||||
| Interest rate | Swaps (OTC Uncleared) | Unrealized appreciation on interest rate swaps** | $ | 18,206,126 | — |
$ | — | |||||||||||
| ** | Some swap contracts require a counterparty to pay or receive a premium, which is disclosed in the Statement of Assets and Liabilities, when applicable, and is not reflected in the cumulative unrealized appreciation (depreciation) presented above. |
The following table presents the swap contracts subject to netting agreements and the collateral delivered related to those swap contracts as of the end of the reporting period.
| Fund | Counterparty | Gross Unrealized Appreciation on Interest Rate Swaps*** |
Gross Unrealized (Depreciation) on Interest Rate Swaps*** |
Net Unrealized Appreciation (Depreciation) on Interest Rate Swaps |
Collateral Pledged to (from) Counterparty |
Net Exposure |
||||||||||||||||
| JPC | Morgan Stanley Capital Services LLC | $ | 9,697,121 | $ | — | $ | 9,697,121 | $ | (9,553,289 | ) | $ | 143,832 | ||||||||||
| JPI | Morgan Stanley Capital Services LLC | 2,883,388 | — | 2,883,388 | (2,793,906 | ) | 89,482 | |||||||||||||||
| JPS | Morgan Stanley Capital Services LLC | 18,206,126 | — | 18,206,126 | (17,936,969 | ) | 269,157 | |||||||||||||||
| *** | Represents gross unrealized appreciation (depreciation) for the counterparty as reported in the Fund’s Portfolio of Investments. |
The following table presents the amount of net realized gain (loss) and change in net unrealized appreciation (depreciation) recognized on swap contracts on the Statement of Operations during the current fiscal period, and the primary underlying risk exposure.
| Fund | Underlying Risk Exposure |
Derivative Instrument |
Net Realized Gain (Loss) from Swaps |
Change in Net Unrealized Appreciation (Depreciation) of Swaps |
||||||||
| JPC | Interest rate | Swaps | $ | (1,433,628 | ) | $ | 11,833,987 | |||||
| JPI | Interest rate | Swaps | (1,831,550 | ) | 5,507,342 | |||||||
| JPS | Interest rate | Swaps | (2,855,167 | ) | 22,430,428 | |||||||
| 70 | NUVEEN |
Market and Counterparty Credit Risk
In the normal course of business each Fund may invest in financial instruments and enter into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the other party to the transaction to perform (counterparty credit risk). The potential loss could exceed the value of the financial assets recorded on the financial statements. Financial assets, which potentially expose each Fund to counterparty credit risk, consist principally of cash due from counterparties on forward, option and swap transactions, when applicable. The extent of each Fund’s exposure to counterparty credit risk in respect to these financial assets approximates their carrying value as recorded on the Statement of Assets and Liabilities.
Each Fund helps manage counterparty credit risk by entering into agreements only with counterparties the Adviser believes have the financial resources to honor their obligations and by having the Adviser monitor the financial stability of the counterparties. Additionally, counterparties may be required to pledge collateral daily (based on the daily valuation of the financial asset) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when each Fund has an unrealized loss, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the valuations fluctuate, either up or down, by at least the pre-determined threshold amount.
4. Fund Shares
Common Share Transactions
Transactions in common shares during the Funds’ current and prior fiscal period were as follows:
| JPC | JPI | |||||||||||||||||||
| Six Months Ended 1/31/18 |
Year Ended 7/31/17 |
Six Months Ended 1/31/18 |
Year Ended 7/31/17 |
|||||||||||||||||
| Common shares: |
||||||||||||||||||||
| Issued in the reorganizations |
— | 6,435,292 | — | — | ||||||||||||||||
| Issued to shareholders due to reinvestment of distributions |
— | — | — | 2,961 | ||||||||||||||||
| JPS | JPT* | |||||||||||||||||||
| Six Months Ended 1/31/18 |
Year Ended 7/31/17 |
Six Months Ended 1/31/18 |
For the Period 1/26/17 (commencement of operations) through 7/31/17 |
|||||||||||||||||
| Common shares: |
||||||||||||||||||||
| Issued in the reorganizations |
— | — | — | — | ||||||||||||||||
| Sold |
— | — | — | 6,815,563 | ||||||||||||||||
| Issued to shareholders due to reinvestment of distributions |
10,637 | — | 4,889 | 3,917 | ||||||||||||||||
| * | Prior to the commencement of operations, the Adviser purchased 4,072 shares, which are still held as of the end of the reporting period. |
5. Investment Transactions
Long-term purchases and sales (including maturities but excluding derivative transactions, where applicable) during the current fiscal period, were as follows:
| JPC | JPI | JPS | JPT | |||||||||||||
| Purchases |
$ | 245,158,431 | $ | 91,089,453 | $ | 91,171,266 | $ | 28,524,235 | ||||||||
| Sales and maturities |
214,558,118 | 90,200,014 | 157,089,915 | 28,935,394 | ||||||||||||
6. Income Tax Information
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all of its net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required.
For all open tax years and all major taxing jurisdictions, management of the Funds has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Open tax years are those that are open for examination by taxing authorities (i.e., generally the last four tax year ends and the interim tax period since then). Furthermore, management of the Funds is also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
| NUVEEN | 71 |
Notes to Financial Statements (Unaudited) (continued)
The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to recognition of premium amortization, timing differences in the recognition of income on real estate investment trust (“REIT”) investments and timing differences in recognizing certain gains and losses on investment transactions. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts as detailed below. Temporary differences do not require reclassification. Temporary and permanent differences do not impact the NAVs of the Funds.
The tables below present the cost and unrealized appreciation (depreciation) of each Fund’s investment portfolio, as determined on a federal income tax basis, as of January 31, 2018.
For purposes of this disclosure, derivative tax cost is generally the sum of any upfront fees or premiums exchanged and any amounts unrealized for income statement reporting but realized in income and/or capital gains tax reporting. If a particular derivative category does not disclose any tax unrealized appreciation or depreciation, the change in value of those derivatives have generally been fully realized for tax purposes.
| JPC | JPI | JPS | JPT | |||||||||||||
| Tax cost of investments |
$ | 1,574,662,039 | $ | 753,566,098 | $ | 2,883,458,833 | $ | 209,072,361 | ||||||||
| Gross unrealized: |
||||||||||||||||
| Appreciation |
$ | 84,328,398 | $ | 52,172,871 | $ | 257,629,492 | $ | 4,718,315 | ||||||||
| Depreciation |
(10,303,602 | ) | (1,455,408 | ) | (43,990,497 | ) | (2,229,759 | ) | ||||||||
| Net unrealized appreciation (depreciation) of investments |
$ | 74,024,796 | $ | 50,717,463 | $ | 213,638,995 | $ | 2,488,556 | ||||||||
| Tax cost of futures contracts |
$ — | $ — | $ — | $ 43,299 | ||||||||||||
| Net unrealized appreciation (depreciation) of futures contracts |
— | — | — | — |
| Tax cost of swaps |
$ — | $ — | $ — | $ — | ||||||||||||
| Net unrealized appreciation (depreciation) of swaps |
9,697,121 | 2,883,388 | 18,206,126 | — |
Permanent differences, primarily due to bond premium amortization adjustments, complex securities character adjustments, federal taxes paid, investments in partnerships, expiration of capital loss carryforwards, nondeductible reorganization expenses and reorganization adjustments resulted in reclassifications among the Funds’ components of common share net assets as of July 31, 2017, the Funds’ last tax year end, as follows:
| JPC | JPI | JPS | JPT | |||||||||||||
| Paid-in-surplus |
$ | (200,893,667 | ) | $ | (1,556 | ) | $ | (318,467,753 | ) | $ | — | |||||
| Undistributed (Over-distribution of) net investment income |
699,835 | 225,787 | 1,918,336 | (81,999 | ) | |||||||||||
| Accumulated net realized gain (loss) |
200,193,832 | (224,231 | ) | 316,549,417 | 81,999 | |||||||||||
The tax components of undistributed net ordinary income and net long-term capital gains as of July 31, 2017, the Funds’ last tax year end, were as follows:
| JPC | JPI | JPS | JPT | |||||||||||||
| Undistributed net ordinary income1 |
$ | — | $ | — | $ | 12,560,159 | $ | 1,480,268 | ||||||||
| Undistributed net long-term capital gains |
— | — | — | — | ||||||||||||
| 1 Undistributed net ordinary income (on a tax basis) has not been reduced for the dividend declared on July 1, 2017 and paid on August 1, 2017. Net ordinary income consists of net taxable income derived from dividends, interest, and net short-term capital gains, if any. |
| |||||||||||||||
The tax character of distributions paid during the Funds’ last tax year ended July 31, 2017, was designated for purposes of the dividends paid deduction as follows:
| JPC | JPI | JPS | JPT3 | |||||||||||||
| Distributions from net ordinary income2 |
$ | 74,906,763 | $ | 40,620,651 | $ | 151,632,579 | $ | 3,479,263 | ||||||||
| Distributions from net long-term capital gains |
— | — | — | — | ||||||||||||
| Return of capital |
1,478,980 | 1,638,466 | — | — | ||||||||||||
| 2 | Net ordinary income consists of net taxable income derived from dividends, interest, net short-term capital gains if any. |
| 3 | For the period January 26, 2017 (commencement of operations) through July 31, 2017. |
| 72 | NUVEEN |
As of July 31, 2017, the Funds’ last tax year end, the Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as shown in the following table. The losses not subject to expiration will be utilized first by a Fund.
| JPC4 | JPI | JPS4 | JPT | |||||||||||||
| Expiration: |
||||||||||||||||
| July 31, 2018 |
$ | 9,385,427 | $ | — | $ | 321,212,384 | $ | — | ||||||||
| July 31, 2019 |
— | — | 10,696,373 | — | ||||||||||||
| Not subject to expiration |
14,017,122 | 3,825,569 | 3,242,529 | 609,903 | ||||||||||||
| Total |
$ | 23,402,549 | $ | 3,825,569 | $ | 335,151,286 | $ | 609,903 | ||||||||
| 4 | A portion of JPC’s and JPS’s capital loss carryforwards is subject to an annual limitation under the Internal Revenue Code and related regulations. |
As of July 31, 2017, the Funds’ last tax year end, the following Funds’ capital loss carryforwards expired as follows:
| JPC | JPS | |||||||
| Expired capital loss carryforwards |
$ | 204,895,930 | $ | 318,378,070 | ||||
During the Funds’ last tax year ended July 31, 2017, JPC utilized $8,851,976 of its capital loss carryforward.
7. Management Fees
Each Fund’s management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Sub-Advisers are compensated for their services to the Funds from the management fees paid to the Adviser. Spectrum also receives compensation on certain portfolio transactions for providing brokerage services to JPS. During the current fiscal period, JPS paid Spectrum commissions of $48,292.
Each Fund’s management fee consists of two components – a fund-level fee, based only on the amount of assets within each individual Fund, and a complex-level fee, based on the aggregate amount of all eligible fund assets managed by the Adviser. This pricing structure enables each Fund’s shareholders to benefit from growth in the assets within their respective Fund as well as from growth in the amount of complex-wide assets managed by the Adviser.
The annual fund-level fee, payable monthly, for each Fund is calculated according to the following schedule:
| Average Daily Managed Assets* | JPC | JPI | JPS | JPT | ||||||||||||
| For the first $500 million |
0.6800 | % | 0.7000 | % | 0.7000 | % | 0.7000 | % | ||||||||
| For the next $500 million |
0.6550 | 0.6750 | 0.6750 | 0.6750 | ||||||||||||
| For the next $500 million |
0.6300 | 0.6500 | 0.6500 | 0.6500 | ||||||||||||
| For the next $500 million |
0.6050 | 0.6250 | 0.6250 | 0.6250 | ||||||||||||
| For managed assets over $2 billion |
0.5800 | 0.6000 | 0.6000 | 0.6000 | ||||||||||||
The annual complex-level fee, payable monthly, for each Fund is calculated by multiplying the current complex-wide fee rate, determined according to the following schedule by the Funds’ daily managed assets:
| Complex-Level Eligible Asset Breakpoint Level* | Effective Complex-Level Fee Rate at Breakpoint Level | |||
| $55 billion |
0.2000 | % | ||
| $56 billion |
0.1996 | |||
| $57 billion |
0.1989 | |||
| $60 billion |
0.1961 | |||
| $63 billion |
0.1931 | |||
| $66 billion |
0.1900 | |||
| $71 billion |
0.1851 | |||
| $76 billion |
0.1806 | |||
| $80 billion |
0.1773 | |||
| $91 billion |
0.1691 | |||
| $125 billion |
0.1599 | |||
| $200 billion |
0.1505 | |||
| $250 billion |
0.1469 | |||
| $300 billion |
0.1445 | |||
| * | For the complex-level fees, managed assets include closed-end fund assets managed by the Adviser that are attributable to certain types of leverage. For these purposes, leverage includes the funds’ use of preferred stock and borrowings and certain investments in the residual interest certificates (also called inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by a TOB trust that has been effectively financed by the trust’s issuance of floating rate securities, subject to an agreement by the Adviser as to certain funds to limit the amount of such assets for determining managed assets in certain circumstances. The complex-level fee is calculated based upon the aggregate daily managed assets of all Nuveen open-end and closed-end Funds that constitute “eligible assets.” Eligible assets do not include assets attributable to investments in other Nuveen funds or assets in excess of a determined amount (originally $2 billion) added to the Nuveen fund complex in connection with the Adviser’s assumption of the management of the former First American Funds effective January 1, 2011. As of January 31, 2018, the complex-level fee rate for each Fund was 0.1591%. |
| NUVEEN | 73 |
Notes to Financial Statements (Unaudited) (continued)
8. Fund Leverage
Borrowings
JPC, JPI, JPS, and JPT have each entered into a borrowing arrangement (collectively, “Borrowings”) which permit the Funds to borrow on a secured basis as a means of leverage. As of the end of the reporting period, each Fund’s maximum commitment amount under these Borrowings is as follows:
| JPC | JPI | JPS | JPT | |||||||||||||
| Maximum commitment amount |
$ | 450,000,000 | $ | 225,000,000 | $ | 850,000,000 | $ | 45,000,000 | ||||||||
As of the end of the reporting period, each Fund’s outstanding balance on its Borrowings was as follows:
| JPC | JPI | JPS | JPT | |||||||||||||
| Outstanding balance on Borrowings |
$ | 437,000,000 | $ | 225,000,000 | $ | 845,300,000 | $ | 42,500,000 | ||||||||
For JPC, JPI and JPS interest is charged on these Borrowings at 1-Month LIBOR (London Inter-Bank Offered Rate) plus 0.85% per annum (0.75% per annum for JPS) on the amounts borrowed and 0.50% per annum on the undrawn balance if the undrawn portion of the Borrowings on a particular day is more than 20% of the maximum commitment amount. JPT’s interest is charged on the Borrowings at a rate equal to the 1-month LIBOR plus 0.70% per annum on the amount borrowed. JPT is also charged a 0.125% commitment fee on the undrawn portion of the Borrowings.
During the current fiscal period, the average daily balance outstanding and average annual interest rate on each Fund’s Borrowings were as follows:
| JPC | JPI | JPS | JPT | |||||||||||||
| Average daily balance outstanding |
$ | 441,478,261 | $ | 225,000,000 | $ | 845,300,000 | $ | 42,500,000 | ||||||||
| Average annual interest rate |
2.19 | % | 2.19 | % | 2.09 | % | 2.01 | % | ||||||||
In order to maintain these Borrowings, the Funds must meet certain collateral, asset coverage and other requirements. Borrowings outstanding are fully secured by eligible securities held in each Fund’s portfolio of investments.
Borrowings outstanding are recognized as “Borrowings” on the Statement of Assets and Liabilities. Interest expense incurred on the borrowed amount and undrawn balance are recognized as a component of “Interest expense” on the Statement of Operations.
Rehypothecation
JPC, JPI and JPS entered into a Rehypothecation Side Letter (“Side Letter”) with its prime brokerage lender, allowing it to re-register the Pledged Collateral in its own name or in a name other than the Funds’ to pledge, repledge, hypothecate, rehypothecate, sell, lend or otherwise transfer or use the Pledged Collateral (the “Hypothecated Securities”) with all rights of ownership as described in the Side Letter. Subject to certain conditions, the total value of the outstanding Hypothecated Securities shall not exceed the lesser of (i) 98% of the outstanding balance on the Borrowings to which the Pledged Collateral relates and (ii) 33 1⁄3% of the Funds’ total assets. The Funds may designate any Pledged Collateral as ineligible for rehypothecation. The Funds may also recall Hypothecated Securities on demand.
The Funds also have the right to apply and set-off an amount equal to one-hundred percent (100%) of the then-current fair market value of such Pledged Collateral against the current Borrowings under the Side Letter in the event that the prime brokerage lender fails to timely return the Pledged Collateral and in certain other circumstances. In such circumstances, however, the Funds may not be able to obtain replacement financing required to purchase replacement securities and, consequently, the Funds’ income generating potential may decrease. Even if a Fund is able to obtain replacement financing, it might not be able to purchase replacement securities at favorable prices.
The Funds will receive a fee in connection with the Hypothecated Securities (“Rehypothecation Fees”) in addition to any principal, interest, dividends and other distributions paid on the Hypothecated Securities.
As of the end of the reporting period, JPC, JPI and JPS each had Hypothecated Securities as follows:
| JPC | JPI | JPS | ||||||||||
| Hypothecated Securities |
$ | 342,175,999 | $ | 180,742,473 | $ | 471,556,757 | ||||||
JPC, JPI and JPS earn Rehypothecation Fees, which are recognized as “Other income” on the Statement of Operations. During the current fiscal period, the Rehypothecation Fees earned by each Fund were as follows:
| JPC | JPI | JPS | ||||||||||
| Rehypothecation Fees |
$ | 106,117 | $ | 46,844 | $ | 122,241 | ||||||
| 74 | NUVEEN |
Reverse Repurchase Agreements
During the current fiscal period, JPC and JPS used reverse repurchase agreements as a means of leverage.
In a reverse repurchase agreement, the Funds sell to the counterparty a security that it holds with a contemporaneous agreement to repurchase the same security at an agreed-upon price and date, with the Funds retaining the risk of loss that is associated with that security. The Funds will pledge assets determined to be liquid by the Adviser to cover its obligations under reverse repurchase agreements. Securities sold under reverse repurchase agreements are recorded as a liability and recognized as “Reverse repurchase agreements” on the Statement of Assets and Liabilities.
Payments made on reverse repurchase agreements are recognized as a component of “Interest expense” on the Statement of Operations.
As of the end of the reporting period, the Funds’ outstanding balances on its reverse repurchase agreements were as follows:
| Fund |
Counterparty | Rate | Principal Amount |
Maturity* | Value | Value and Accrued Interest |
||||||||||||||
| JPC | BNP Paribas |
1-Month LIBOR plus 0.85% | $ | (125,000,000 | ) | 8/09/22 | $ | (125,000,000 | ) | $ | 125,015,998 | |||||||||
| JPS | BNP Paribas |
1-Month LIBOR plus 0.75% | (200,000,000 | ) | 9/28/21 | (200,000,000 | ) | 200,025,597 | ||||||||||||
| * | The Fund may repurchase the reverse repurchase agreement prior to the maturity date and/or counterparty may accelerate maturity upon pre-specified advance notice. |
During the current fiscal period, the average daily balance outstanding and weighted average interest rate on the Funds’ reverse repurchase agreements were as follows:
| JPC | JPS | |||||||
| Average daily balance outstanding |
$ | 125,000,000 | ** | $ | 200,000,000 | |||
| Weighted average interest rate |
2.20 | % | 2.09 | % | ||||
| ** | For the period August 9, 2017 (initial purchase of reverse repurchase agreements) through January 31, 2018. |
The following table presents the reverse repurchase agreements subject to netting agreements and the collateral delivered related to those reverse repurchase agreements.
| Fund | Counterparty | Reverse Repurchase Agreements*** |
Collateral Pledged to |
Net Exposure |
||||||||||||
| JPC | BNP Paribas | $ | (125,015,998 | ) | $ | 125,015,998 | $ | — | ||||||||
| JPS | BNP Paribas | (200,025,597 | ) | 200,025,597 | — | |||||||||||
| *** | Represents gross value and accrued interest for the counterparty as reported in the preceding table. |
| **** | As of the end of the reporting period, the value of the collateral pledged to the counterparty exceeded the value of the reverse repurchase agreements. |
9. Inter-Fund Lending
Inter-Fund Borrowing and Lending
The Securities and Exchange Commission (“SEC”) has granted an exemptive order permitting registered open-end and closed-end Nuveen funds to participate in an inter-fund lending facility whereby the Nuveen funds may directly lend to and borrow money from each other for temporary purposes (e.g., to satisfy redemption requests or when a sale of securities “fails,” resulting in an unanticipated cash shortfall) (the “Inter-Fund Program”). The closed-end Nuveen funds, including the Funds covered by this shareholder report, will participate only as lenders, and not as borrowers, in the Inter-Fund Program because such closed-end funds rarely, if ever, need to borrow cash to meet redemptions. The Inter-Fund Program is subject to a number of conditions, including, among other things, the requirements that (1) no fund may borrow or lend money through the Inter-Fund Program unless it receives a more favorable interest rate than is typically available from a bank or other financial institution for a comparable transaction; (2) no fund may borrow on an unsecured basis through the Inter-Fund Program unless the fund’s outstanding borrowings from all sources immediately after the inter-fund borrowing total 10% or less of its total assets; provided that if the borrowing fund has a secured borrowing outstanding from any other lender, including but not limited to another fund, the inter-fund loan must be secured on at least an equal priority basis with at least an equivalent percentage of collateral to loan value; (3) if a fund’s total outstanding borrowings immediately after an inter-fund borrowing would be greater than 10% of its total assets, the fund may borrow through the inter-fund loan on a secured basis only; (4) no fund may lend money if the loan would cause its aggregate outstanding loans through the Inter-Fund Program to exceed 15% of its net assets at the time of the loan; (5) a fund’s inter-fund loans to any one fund shall not exceed 5% of the lending fund’s net assets; (6) the duration of inter-fund loans will be limited to the time required to receive payment for securities sold, but in no event more than seven days; and (7) each inter-fund loan may be called on one business day’s notice by a lending fund and may be repaid on any day by a borrowing fund. In addition, a Nuveen fund may participate in the Inter-Fund Program only if and to the extent that such participation is consistent with the fund’s investment objective and investment policies. The Board is responsible for overseeing the Inter-Fund Program.
| NUVEEN | 75 |
Notes to Financial Statements (unaudited) (continued)
The limitations detailed above and the other conditions of the SEC exemptive order permitting the Inter-Fund Program are designed to minimize the risks associated with Inter-Fund Program for both the lending fund and the borrowing fund. However, no borrowing or lending activity is without risk. When a fund borrows money from another fund, there is a risk that the loan could be called on one day’s notice or not renewed, in which case the fund may have to borrow from a bank at a higher rate or take other actions to payoff such loan if an inter-fund loan is not available from another fund. Any delay in repayment to a lending fund could result in a lost investment opportunity or additional borrowing costs.
During the current reporting period, none of the Funds have entered into any inter-fund loan activity.
10. New Accounting Pronouncements
FASB Accounting Standards Update (“ASU”) 2017-08 (“ASU 2017-08”) Premium Amortization on Purchased Callable Debt Securities
The FASB has issued ASU 2017-08, which shortens the premium amortization period for purchased non-contingently callable debt securities. ASU 2017-08 specifies that the premium amortization period ends at the earliest call date, for purchased non-contingently callable debt securities. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management is currently evaluating the implications of ASU 2017-08, if any.
FASB ASU 2016-18: Statement of Cash Flows – Restricted Cash (“ASU 2016-18”)
The FASB has issued ASU 2016-18, which will require entities to include the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the beginning and ending cash balances in the Statement of Cash Flows. The guidance will be applied retrospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Management is currently evaluating the implications of ASU 2016-18, if any.
| 76 | NUVEEN |
Fund Information
| Board of Trustees | ||||||||||
| Margo Cook* | Jack B. Evans | William C. Hunter | Albin F. Moschner | John K. Nelson | William J. Schneider | |||||
| Judith M. Stockdale | Carole E. Stone | Terence J. Toth | Margaret L. Wolff | Robert L. Young | ||||||
| * | Interested Board Member. |
| Fund Manager Nuveen Fund Advisors, LLC 333 West Wacker Drive Chicago, IL 60606 |
Custodian State Street
Bank Boston, MA 02111 |
Legal Counsel Chapman and Cutler LLP Chicago, IL 60603 |
Independent Registered KPMG LLP Randolph Street Chicago, IL 60601 |
Transfer Agent and Computershare Trust Company, N.A. 250 Royall Street Canton, MA 02021 (800) 257-8787 | ||||
Quarterly Form N-Q Portfolio of Investments Information
Each Fund is required to file its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. You may obtain this information directly from the SEC. Visit the SEC on-line at http://www.sec.gov or in person at the SEC’s Public Reference Room in Washington, D.C. Call the SEC toll-free at (800) SEC-0330 for room hours and operation.
Nuveen Funds’ Proxy Voting Information
You may obtain (i) information regarding how each fund voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30, without charge, upon request, by calling Nuveen toll-free at (800) 257-8787 or on Nuveen’s website at www.nuveen.com and (ii) a description of the policies and procedures that each fund used to determine how to vote proxies relating to portfolio securities without charge, upon request, by calling Nuveen toll free at (800) 257-8787. You may also obtain this information directly from the SEC. Visit the SEC on-line at http://www.sec.gov.
CEO Certification Disclosure
Each Fund’s Chief Executive Officer (CEO) has submitted to the New York Stock Exchange (NYSE) the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual. Each Fund has filed with the SEC the certification of its CEO and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act.
Common Share Repurchases
Each Fund intends to repurchase, through its open market share repurchase program, shares of their own common stock at such times and in such amounts as is deemed advisable. During the period covered by this report, each Fund repurchased shares of its common stock, as shown in the accompanying table. Any future repurchases will be reported to shareholders in the next annual or semi-annual report.
| JPC | JPI | JPS | JPT |
|||||||||||||
| Common shares repurchased |
— | — | — | — | ||||||||||||
FINRA BrokerCheck
The Financial Industry Regulatory Authority (FINRA) provides information regarding the disciplinary history of FINRA member firms and associated investment professionals. This information as well as an investor brochure describing FINRA BrokerCheck is available to the public by calling the FINRA BrokerCheck Hotline number at (800) 289-9999 or by visiting www.FINRA.org.
| NUVEEN | 77 |
Used in this Report
| ∎ | Average Annual Total Return: This is a commonly used method to express an investment’s performance over a particular, usually multi-year time period. It expresses the return that would have been necessary each year to equal the investment’s actual cumulative performance (including change in NAV or offer price and reinvested dividends and capital gains distributions, if any) over the time period being considered. |
| ∎ | ICE BofAML Contingent Capital Index: An index that tracks the performance of all contingent capital debt publicly issued in the major domestic and Eurobond markets, including investment grade and sub-investment grade issues. Index returns assume reinvestment of distributions, but do not include the effects of any applicable sales charges or management fees. |
| ∎ | ICE BofAML Core Plus Fixed Rate Preferred Securities Index: An index that tracks the performance of fixed rate U.S. dollar denominated preferred securities issued in the U.S. domestic market. Index returns do not include the effects of any sales charges or management fees. |
| ∎ | ICE BofAML Preferred Securities Fixed Rate Index: An index that tracks the performance of fixed rate U.S. dollar denominated preferred securities issued in the U.S. domestic market. Qualifying securities must be rated investment grade (based on an average of Moody’s, S&P, and Fitch) and must have an investment grade rated country of risk (based on an average of Moody’s, S&P, and Fitch foreign currency long-term sovereign debt ratings). In addition, qualifying securities must be issued as public securities or through a 144A filing, must be issued in $25, $50 or $100 par/liquidation preference increments, must have a fixed coupon or dividend schedule, and must have a minimum amount outstanding of $100 million. The index returns assume reinvestment of dividends, but do not include the effects of any sales charges or management fees. |
| ∎ | ICE BofAML U.S. All Capital Securities Index: An index comprised of four sub-indexes that better represent the full breadth of the preferred and hybrid securities market, including investment grade and below investment grade exchange traded $25 par preferreds and investment grade and below investment grade rated $1,000 par capital securities. Index returns assume reinvestment of distributions, but do not reflect any applicable sales charges or management fees. |
| ∎ | Contingent Capital Securities (CoCos): CoCos are 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 Acquiring Fund 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. |
| 78 | NUVEEN |
| ∎ | Duration: Duration is a measure of the expected period over which a bond’s principal and interest will be paid, and consequently is a measure of the sensitivity of a bond’s or bond fund’s value to changes when market interest rates change. Generally, the longer a bond’s or fund’s duration, the more the price of the bond or fund will change as interest rates change. |
| ∎ | Effective Leverage: Effective leverage is a fund’s effective economic leverage, and includes both regulatory leverage (see below) and the leverage effects of certain derivative investments in the fund’s portfolio. |
| ∎ | JPC Blended Benchmark (New Blended Benchmark): A blended return consisting of: 1) 50% ICE BofAML Fixed Rate Preferred Securities Index, which tracks the performance of fixed rate U.S. dollar denominated preferred securities issued in the U.S. domestic market; 2) 30% ICE BofAML U.S. All Capital Securities Index (IOCS), a subset of the ICE BofAML U.S. Corporate Index including all fixed to- floating rate, perpetual callable and capital securities, which better represents the full breadth of the preferred and hybrid securities market, including investment grade and below investment grade exchange traded $25 par preferreds and investment grade and below investment grade rated $1,000 par capital securities; and 3) 20% ICE BofAML Contingent Capital Securities USD Hedged Index (CoCo), which tracks the performance of all contingent capital debt publicly issued in the major domestic and Eurobond markets, including investment grade and sub-investment grade issues. Index returns assume reinvestment of distributions, but do not include the effects of any applicable sales charges or management fees. |
| ∎ | JPI Blended Benchmark Index: The JPI Blended Benchmark is a blended return consisting of: 1) 60% ICE BofAML U.S. All Capital Securities Index (IOCS), a subset of the ICE BofAML U.S. Corporate Index including all fixed to- floating rate, perpetual callable and capital securities, which better represents the full breadth of the preferred and hybrid securities market, including investment grade and below investment grade exchange traded $25 par preferreds and investment grade and below investment grade rated $1,000 par capital securities; and 2) 40% ICE BofAML Contingent Capital Index, which tracks the performance of all contingent capital debt publicly issued in the major domestic and Eurobond markets, including investment grade and sub-investment grade issues. Benchmark returns assume reinvestment of distributions, but do not include the effects of any sales charges or management fees. |
| ∎ | JPS Blended Benchmark (New Blended Benchmark): A blended return consisting of: 1) 40% of the ICE BofAML Contingent Capital Securities USD Hedged Index (CoCo), which tracks the performance of all contingent capital debt publicly issued in the major domestic and Eurobond markets, including investment grade and sub-investment-grade issues; and 2) 60% of the ICE BofAML U.S. All Capital Securities Index (IOCS), a subset of the ICE BofAML U.S. Corporate Index including all fixed-to-floating rate, perpetual callable and capital securities, which better represents the full breadth of the preferred and hybrid securities market, including investment grade and below investment grade exchange traded $25 par preferreds and investment grade and below investment grade rated $1,000 par capital securities. Index returns do not include the effects of any sales charges or management fees. |
| ∎ | Leverage: Leverage is created whenever a fund has investment exposure (both reward and/or risk) equivalent to more than 100% of the investment capital. |
| ∎ | Net Asset Value (NAV) Per Share: A fund’s Net Assets is equal to its total assets (securities, cash, accrued earnings and receivables) less its total liabilities. NAV per share is equal to the fund’s Net Assets divided by its number of shares outstanding. |
| ∎ | Option-adjusted spread (OAS): An option-adjusted spread is a more meaningful spread statistic for mortgage-backed securities, which experience cash flows over multiple time periods, and for which the borrower has the option to re-pay principal at any time. OAS is based on modeled forecasts for voluntary repayments, as well as discounted cash flows, to arrive at a market-weighted spread over a known Treasury benchmark. |
| ∎ | Regulatory Leverage: Regulatory leverage consists of preferred shares issued by or borrowings of a fund. Both of these are part of a fund’s capital structure. Regulatory leverage is subject to asset coverage limits set forth in the Investment Company Act of 1940. |
| NUVEEN | 79 |
Glossary of Terms Used in this Report (continued)
| ∎ | Yield-to-Worst (YTW): Represents the lowest potential yield that an investor would receive on a bond if the issuer does not default. The yield to worst is calculated by making worst-case scenario assumptions on the issue by calculating the returns that would be received if provisions, including prepayment, call or sinking fund, are used by the issuer. The YTW is used to evaluate the worst-case scenario for yield to help investors manage their risk and exposures. |
| 80 | NUVEEN |
Easily and Conveniently
| NUVEEN | 81 |
Notes
| 82 | NUVEEN |
Notes
| NUVEEN | 83 |
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| Since 1898, financial advisors and their clients have relied on Nuveen to provide dependable investment solutions through continued adherence to proven, long-term investing principles. Today, we offer a range of high quality solutions designed to be integral components of a well-diversified core portfolio. | ||||||||||||||
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| Focused on meeting investor needs.
Nuveen is the investment manager of TIAA. We have grown into one of the world’s premier global asset managers, with specialist knowledge across all major asset classes and particular strength in solutions that provide income for investors and that draw on our expertise in alternatives and responsible investing. Nuveen is driven not only by the independent investment processes across the firm, but also the insights, risk management, analytics and other tools and resources that a truly world-class platform provides. As a global asset manager, our mission is to work in partnership with our clients to create solutions which help them secure their financial future. |
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| Find out how we can help you.
To learn more about how the products and services of Nuveen may be able to help you meet your financial goals, talk to your financial advisor, or call us at (800) 257-8787. Please read the information provided carefully before you invest. Investors should consider the investment objective and policies, risk considerations, charges and expenses of any investment carefully. Where applicable, be sure to obtain a prospectus, which contains this and other relevant information. To obtain a prospectus, please contact your securities representative or Nuveen, 333 W. Wacker Dr., Chicago, IL 60606. Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds
at: www.nuveen.com/cef |
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ESA-B-0118D 445042-INV-B-03/19
Item 2. Code of Ethics.
Not applicable to this filing.
Item 3. Audit Committee Financial Expert.
Not applicable to this filing.
Item 4. Principal Accountant Fees and Services.
Not applicable to this filing.
Item 5. Audit Committee of Listed Registrants.
Not applicable to this filing.
Item 6. Schedule of Investments.
(a) See Portfolio of Investments in Item 1.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to this filing.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to this filing.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board implemented after the registrant last provided disclosure in response to this item.
Item 11. Controls and Procedures.
| (a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
| (b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
File the exhibits listed below as part of this Form.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable to this filing.
(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: See EX-99.CERT attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons: Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2 (b) under the 1940 Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an Exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registration specifically incorporates it by reference: See EX-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Preferred and Income Securities Fund
| By (Signature and Title) | /s/ Gifford R. Zimmerman |
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| Gifford R. Zimmerman | ||||
| Vice President and Secretary |
Date: April 5, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By (Signature and Title) | /s/ Cedric H. Antosiewicz |
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| Cedric H. Antosiewicz | ||||
| Chief Administrative Officer | ||||
| (principal executive officer) |
Date: April 5, 2018
| By (Signature and Title) | /s/ Stephen D. Foy |
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| Stephen D. Foy | ||||
| Vice President and Controller | ||||
| (principal financial officer) |
Date: April 5, 2018