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 | 811-05642 |
Nuveen Multi-Market Income 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)
Kevin J. McCarthy
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: June 30
Date of reporting period: June 30, 2016
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 policymaking 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.
Closed-End Funds |
Nuveen | ||
Closed-End Funds |
| Annual Report June 30, 2016
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Nuveen Multi-Market Income Fund |
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NUVEEN | 3 |
to Shareholders
Dear Shareholders,
The U.S. economy is now seven years into the recovery, but its pace remains stubbornly subpar compared to past recoveries. Economic data continues to be a mixed bag, as it has been throughout this expansion period. While the unemployment rate fell below its pre-recession level and wages have grown slightly, a surprisingly weak jobs growth report in May cast doubt over the future strength of the labor market. The June employment report was much stronger, however, easing fears that a significant downtrend was emerging. The housing market has improved markedly but its contribution to the recovery has been lackluster. Deflationary pressures, including the dramatic slide in commodity prices, have kept inflation much lower for longer than many expected.
U.S. growth remains modest, while economic conditions elsewhere continue to appear vulnerable. On June 23, 2016, the U.K. voted to leave the European Union, known as “Brexit.” The outcome surprised the global markets, leading to high levels of volatility across equities, fixed income and currencies in the days following the vote. Although the turbulence subsided not long after and many asset classes have largely recovered, uncertainties remain about the Brexit separation process and the economic and political impacts on the U.K., Europe and the rest of the world.
In the meantime, global central banks remain accommodative in efforts to bolster growth. The European Central Bank and Bank of Japan have been providing aggressive monetary stimulus, including adopting negative interest rates in both Europe and Japan, as their economies continue to lag the U.S.’s recovery. China’s policy makers have also continued to manage its slowdown, but investors are still worried about where the world’s second-largest economy might ultimately land.
Many of these ambiguities – both domestic and international – have kept the U.S. Federal Reserve (Fed) from raising short-term interest rates any further since December’s first and only increase thus far. While markets rallied earlier in the year on the widely held expectation that the Fed would defer any increases until June, the unusually weak May jobs report and the Brexit concerns compelled the Fed to hold rates steady at its June meeting. Although labor market conditions improved in June, Britain’s “leave” vote is expected to keep the Fed on hold until later in 2016.
With global economic growth still looking fairly fragile, during certain periods financial markets were volatile over the past year. Although sentiment has improved and conditions have generally recovered from the intense volatility seen in early 2016 and following the Brexit vote in June, we expect that turbulence remains on the horizon for the time being. In this environment, Nuveen remains committed to both managing downside risks and seeking upside potential. If you’re concerned about how resilient your investment portfolio might be, we encourage you to talk to your financial advisor.
On behalf of the other members of the Nuveen Fund Board, we look forward to continuing to earn your trust in the months and years ahead.
Sincerely,
William J. Schneider
Chairman of the Board
August 23, 2016
4 | NUVEEN |
Comments
Nuveen Multi-Market Income Fund (JMM)
Nuveen Multi-Market Income Fund (JMM) is advised by Nuveen Fund Advisors, LLC (NFAL) and features portfolio management by Nuveen Asset Management, LLC (NAM). Throughout the reporting period, the portfolio management team has included Jason J. O’Brien, CFA, Chris J. Neuharth and John T. Fruit, CFA. Peter L. Agrimson, CFA, joined the Fund as a co-portfolio manager on March 18, 2016.
In the following paragraphs, they discuss economic and market conditions, their management strategy and the performance of the Fund for the twelve-month reporting period ended June 30, 2016.
What factors affected the U.S. economy and financial markets during the twelve-month reporting period ended June 30, 2016?
Over the twelve-month period, U.S. economic data continued to point to subdued growth, rising employment and tame inflation. Economic activity has continued to hover around a 2% annualized growth rate since the end of the Great Recession in 2009, as measured by real gross domestic product (GDP), which is the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes. For the second quarter of 2016, real GDP increased at an annual rate of 1.2%, as reported by the “advance” estimate of the Bureau of Economic Analysis, up from 0.8% in the first quarter of 2016.
The labor and housing markets improved over the reporting period, although the momentum appeared to slow toward the end of the period. As reported by the Bureau of Labor Statistics, the unemployment rate fell to 4.9% in June 2016 from 5.3% in June 2015, and job gains averaged slightly above 200,000 per month for the past twelve months. The S&P CoreLogic Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 5.0% annual gain in May 2016 (most recent data available at the time this report was prepared) (effective July 26, 2016, subsequent to the close of this reporting period, the S&P/Case-Shiller U.S. National Home Price Index was renamed the S&P CoreLogic Case-Shiller U.S. National Home Price Index). The 10-City and 20-City Composites reported year-over-year increases of 4.4% and 5.2%, respectively.
Consumers, whose purchases comprise the largest component of the U.S. economy, benefited from employment growth and firming wages over the twelve-month reporting period. Although consumer spending gains were rather muted in the latter half of 2015, a spending surge in the second quarter of 2016 helped offset weaker business investment. A backdrop of low inflation also contributed to consumers’ willingness to buy. The Consumer Price Index (CPI) rose 1.0% over the twelve-month reporting period ended June 30, 2016 on a seasonally adjusted basis, as reported by the U.S. Bureau of Labor Statistics. The core CPI (which excludes food and energy) increased 2.3% during the same period, slightly above the Fed’s unofficial longer term inflation objective of 2.0%.
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 Fund disclaims 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). 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. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. 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.
NUVEEN | 5 |
Portfolio Managers’ Comments (continued)
Business investment remained weak over the reporting period. Corporate earnings growth slowed during 2015, reflecting an array of factors ranging from weakening demand amid sluggish U.S. and global growth to the impact of falling commodity prices and a strong U.S. dollar. Although energy prices rebounded off their lows and the dollar pared some of its gains in the first half of 2016, caution prevailed. Financial market turbulence in early 2016 and political uncertainties surrounding the U.K.’s “Brexit” vote to leave the European Union (EU) and the upcoming U.S. presidential election dampened capital spending.
With the current expansion considered to be on solid footing, the U.S. Federal Reserve (Fed) prepared to raise one of its main interest rates, which had been held near zero since December 2008 to help stimulate the economy. After delaying the rate change for most of 2015 because of a weak global economic growth outlook, the Fed announced in December 2015 that it would raise the fed funds target rate by 0.25%. The news was widely expected and therefore had a relatively muted impact on the financial markets.
Although the Fed continued to emphasize future rate increases would be gradual, investors worried about the pace. This, along with uncertainties about the global macroeconomic backdrop, another downdraft in oil prices and a spike in stock market volatility triggered significant losses across assets that carry more risk and fueled demand for “safe haven” assets such as Treasury bonds and gold from January through mid-February. However, fear began to subside in March, propelling assets that carry more risk higher. The Fed held the rate steady at both the January and March policy meetings, as well as lowered its expectations to two rate increases in 2016 from four. Also boosting investor confidence were reassuring statements from the European Central Bank (ECB), some positive economic data in the U.S. and abroad, a retreat in the U.S. dollar and an oil price rally. At its April meeting, the Fed indicated its readiness to raise its benchmark rate at the next policy meeting in June. However, a very disappointing jobs growth report in May and the significant uncertainty surrounding the U.K.’s Brexit vote dampened the Fed’s outlook. These concerns led the Fed to again hold rates steady at its June and July meetings.
What key strategies were used to manage the Fund during this twelve-month reporting period ended June 30, 2016?
The Fund’s investment objective is to achieve high monthly income consistent with prudent risk to capital. The management team invests the Fund’s assets primarily in taxable fixed income securities including, but not limited to: U.S. agency and privately issued mortgage-backed securities; high yield and investment grade corporate bonds; and asset-backed securities.
How did the Fund perform during this twelve-month reporting period ended June 30, 2016?
The table in the Performance Overview and Holding Summaries section of this report provides total return performance for the Fund for the one-year, five-year and ten-year periods ended June 30, 2016. The Fund’s total return at net asset value (NAV) is compared with the performance of a corresponding market index. For the twelve-month reporting period ended June 30, 2016, JMM underperformed its blended benchmark, which is composed of 75% Barclays U.S. Government/Mortgage Index and 25% Barclays U.S. Corporate High-Yield Index.
Throughout the reporting period, the U.S. economy generally showed resilience in the face of weaker growth and various forms of stress and unrest across the globe. At the start of the period, a slowdown in China and ongoing weakness across emerging markets led to renewed volatility and downward pressure for commodity prices across the board. China fears plus a global supply glut led oil prices to sell off sharply, hitting a 12-year low of approximately $26-per-barrel for West Texas Intermediate (WTI) crude in February 2016. However, in the final four months of the reporting period, news of a possible production freeze and a string of unexpected production outages helped prices rally back to around the $50-per-barrel mark for WTI crude.
With the U.S. economy expanding at a moderate pace and the unemployment rate falling to 5.0%, Fed policymakers decided to raise the federal funds rate by 0.25% in December, marking the end of a historically long period of low rates
6 | NUVEEN |
designed to boost the recovery. However, outside of the U.S., the economic outlook grew more uncertain as the U.K.’s late-June referendum on whether to stay or leave the European Union (EU) weighed on sentiment and markets, especially in Europe. Angst surrounding growth in China also remained front and center as policymakers struggled to promote growth in this weakening economy. Japan attempted to boost growth and stave off deflation with an unexpected rate cut at the end of January, but then held off on any additional response, much to the chagrin of investors. The ECB unleashed its own combination of easing measures in March 2016. Then on June 23, 2016 British voters shocked the world with their unexpected “Brexit” decision to leave the EU, forcing the resignation of the country’s prime minister and temporarily rocking world markets. Largely due to the divergence between U.S. and global growth along with tepid inflation readings, the Fed held off on additional interest rate hikes during the reporting period, while also lowering expectations for further increases in 2016.
As a result, the Treasury yield curve flattened during the reporting period as rates for Treasury securities with maturities of one year and less moved modestly higher, while rates for intermediate- and long-term Treasuries fell substantially. For example, yields on one-year T-bills rose by 17 basis points, while 10-year Treasury rates were 85 basis points lower by period end. While Treasury yields ended the period at extremely low levels by historical standards, they remained attractive when compared to the negative rates found in many places across Europe and Asia.
In the first seven-and-a-half months of the reporting period, risk premiums widened across all fixed income sectors as investors favored higher quality segments of the market such as Treasuries and mortgage-backed securities. In the investment grade corporate market, commodity price volatility and heavy new issue supply kept technicals weak in higher risk sectors, causing lower quality bonds and commodity related industries to underperform significantly. Analysts at ratings agencies reduced price forecasts for energy and metals, causing negative outlook changes for several issuers and exacerbating selling pressure in an already weak market. A large amount of merger and acquisition (M&A) related financing in the latter quarters of 2015 also took a toll on the technical backdrop. Market technicals remained weak as dealers tried to keep inventory levels low, which created stress across all segments of the corporate market. Financial spreads remained steady and this sector outperformed industrials, which were challenged by commodity price volatility and heavy new issue supply. Around mid-February, oil prices began to rebound off their lows and the Fed indicated a more cautious approach to rate hikes, causing a strong rally in high yield and investment grade credit. The technical backdrop also improved after the ECB announced that it would start buying euro-denominated credit issues in both the primary and secondary markets. This caused foreign investors to increase their holdings of U.S. corporate paper given more attractive valuations in the U.S. market. Industrials outperformed financials in this latter part of the reporting period as commodity prices stabilized and investors became concerned about loan performance given uncertainty in the global economic outlook.
High yield bond prices were under extreme pressure in the first seven months of the reporting period as global growth concerns, the Fed’s mixed messages and accumulating sector-specific issues weighed on confidence and led to a poor technical backdrop. A flight-to-quality ensued due to persistent commodity weakness and increased distress among lower rated issues. Energy bonds, which comprise approximately 13% of the market, continued to be pressured by falling crude prices, while the weak global growth outlook also caused base metal, iron ore and coal bonds to trade at multi-year lows. Elevated risks in the commodity sector curbed risk appetites and led to underperformance in the CCC rated credit space, which is more exposed to these cyclically weak areas. However, high yield bond prices finally found support midway through February 2016, after suffering through a 20-month long bear market. High yield spreads tightened dramatically and the energy and metals/mining sectors enjoyed strong recoveries after bearing the brunt of the market sell-off. The recovery, however, was not enough to offset earlier underperformance and U.S. high yield fell short of all other U.S. fixed income asset classes for the full reporting period.
In the securitized sectors, mortgage-backed securities (MBS) issued by government agencies such as Fannie Mae (FNMA), Ginnie Mae (GNMA) and Freddie Mac (FHLMC) as well as non-agency MBS performed fairly well during the
NUVEEN | 7 |
Portfolio Managers’ Comments (continued)
reporting period. These segments outpaced Treasuries as mortgage delinquencies continued to decline and housing market fundamentals remained broadly supportive of the MBS market. Generally speaking, valuations were steady and investors embraced the combination of lower volatility and superior liquidity found in the agency MBS sector. Also, the Fed implied that it would continue to re-invest MBS paydowns from its holdings until policy normalization was well under way, which gave investors comfort that technicals in the MBS segment would remain favorable through much of 2016. However, the segment did come under pressure in the final month of the reporting period due to the June rate rally, modest pickup in volatility and Brexit vote, which pushed mortgage spreads wider. Traditional consumer asset-backed securities (ABS) outperformed Treasuries as consumer credit metrics outside of subprime auto remained solid. The ABS sector continued to benefit from strong consumer loan performance and favorable supply/demand conditions. Commercial mortgage-backed securities (CMBS) performed very well over the entirety of the reporting period, following a difficult first half caused by higher levels of new issuance and ongoing concerns about the quality of loans going into new deals. In the second half of the reporting period, the CMBS sector was boosted by global central bank support, increased appetite for risk, sharply reduced supply and strong demand for high quality, non-government securities, which all contributed to the tightening of risk premiums in the segment.
The most significant detractor that impacted the Fund’s performance during the reporting period was our interest rate strategy, both in terms of duration (interest rate sensitivity) and yield curve positioning. In expectation of higher rates during the reporting period, we positioned the Fund defensively with a duration that was shorter than its benchmark. While short-term rates did rise modestly, long-term rates fell much more and the Fund’s shorter duration proved to be a drag on performance. Along the same lines, the types of securities we emphasize in this portfolio leave the Fund underexposed to the long end of the yield curve. Therefore, curve positioning also detracted from performance as long-term rates rallied during the reporting period.
Also, our security selection and sector exposures had a modestly negative impact on the Fund’s performance. Security selection detracted slightly in the ABS sector where our emphasis on non-government mortgage-related securities in the sector weighed on results in the second half of the reporting period. The Fund’s CMBS exposure was also a detractor. We emphasized lower rated investment grade securities in the CMBS portfolio, which was detrimental to returns given the underperformance of lower credit qualities relative to higher rated securities in the sector. As the markets recovered late in the reporting period, buyers of CMBS rated BBB- were hesitant to return to the market and that segment of the Fund underperformed. On the other hand, the Fund’s overweight exposure to the MBS sector had a favorable impact on results. The Fund’s agency MBS and non-agency MBS exposure benefited from the continued strength in the housing market during the reporting period, and therefore had a positive impact on the Fund’s performance.
Results within the credit sectors were mixed during the reporting period. The Fund benefited from its small underweight to high yield credit, especially early in the reporting period when this segment sold off sharply. On the other hand, the Fund’s exposure to the metals/mining and energy sectors within credit held back investment performance.
At the end of the reporting period, the market was priced for no changes in Fed policy for the balance of the year, which we believe is appropriate given the current macro outlook. That being said, 10-year Treasury rates at the end of the reporting period were at levels we have not seen for more than a year and that embody a significant amount of risk aversion and uncertainty. We see a reasonable probability that rates, while remaining historically low, may retrace some of their downward movement over the coming months as the durability of the U.S. economy is confirmed by incoming data and investors reassess the global macro environment. Absent a significant downgrade to our view for the U.S. economy or a repricing of rates higher, we are keeping the Fund’s duration short versus its benchmark for the time being.
We will maintain the Fund’s exposure to non-agency MBS and mortgage-related ABS as those sectors should continue to benefit from the solid fundamentals of the housing market. We will also retain the Fund’s overweight down the capital stack in securities rated BBB- in the non-agency CMBS sector. Although price appreciation has slowed in commercial
8 | NUVEEN |
real estate, the credit fundamentals are sound. Supply expectations are muted and negative net issuance should continue to be a positive technical factor.
In the corporate bond market, our view is that credit fundamentals, although clearly having peaked, will remain supportive of current valuations. While periods of volatility are almost certain to persist, strong technicals and accommodative monetary policy are providing a solid environment for credit investors. We believe long-term investors are being fairly compensated for taking credit and liquidity risk; therefore, we expect to maintain the Fund’s exposures to high yield and investment grade corporates. We will look to security selection to add value, while being mindful of the increased role liquidity continues to play in this environment. As always, we will continually evaluate relative value opportunities and shift the Fund’s exposures toward the segments of the market where we see the best long-term risk/reward equation.
We use U.S. Treasury futures as part of an overall portfolio construction strategy to manage portfolio duration and yield curve exposure. The effect of these activities during the reporting period was negative.
The Fund may also purchase securities on a when-issued or forward commitment basis. Delivery and payment for securities that have been purchased in this manner can take place a month or more after the transaction date. Such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The purchase of securities on a when-issued or forward commitment basis may increase the volatility of the Fund’s net asset value if the Fund makes such purchases while remaining substantially fully invested.
NUVEEN | 9 |
Leverage
IMPACT OF THE FUND’S LEVERAGE STRATEGY ON PERFORMANCE
One important factor impacting the returns of the Fund relative to its benchmark was the Fund’s use of leverage through the use of reverse repurchase agreements and mortgage dollar rolls. The Fund uses leverage because our research has shown that, over time, leveraging provides opportunities for additional income and total return for common shareholders. However, use of leverage also can expose shareholders to additional volatility. For example, as the prices of securities held by the Fund decline, the negative impact of these valuation changes on NAV and 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 the Fund generally are rising. The Fund’s use of leverage had a positive impact on performance during this reporting period.
As of June 30, 2016, the Fund’s percentages of leverage are shown in the accompanying table.
JMM | ||||
Effective Leverage* | 30.30 | % | ||
Regulatory Leverage* | 0.00 | % |
* | 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 a Fund’s capital structure. Regulatory leverage is subject to asset coverage limits set forth in the Investment Company Act of 1940. |
10 | NUVEEN |
Information
DISTRIBUTION INFORMATION
The following information regarding the Fund’s distributions is current as of June 30, 2016. The Fund’s distribution levels may vary over time based on the Fund’s investment activity and portfolio investment value changes.
During the current reporting period, the Fund’s distributions to shareholders were as shown in the accompanying table.
Monthly Distributions (Ex-Dividend Date) | Per Share Amounts | |||
July 2015 | $ | 0.0400 | ||
August | 0.0400 | |||
September | 0.0400 | |||
October | 0.0400 | |||
November | 0.0400 | |||
December | 0.0400 | |||
January | 0.0400 | |||
February | 0.0400 | |||
March | 0.0400 | |||
April | 0.0400 | |||
May | 0.0400 | |||
June 2016 | 0.0360 | |||
Total Distributions from Net Investment Income | $ | 0.4760 | ||
Current Distribution Rate* | 5.78 | % |
* | 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. |
The Fund seeks to pay regular monthly dividends out of its net investment income at a rate that reflects its past and projected net income performance. To permit the 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 the 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 the 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. The Fund will, over time, pay all its net investment income as dividends to shareholders.
As of June 30, 2016, the Fund had a positive UNII balance for tax purposes and a positive UNII balance for financial reporting purposes.
All monthly dividends paid by the Fund during the current reporting period were paid from net investment income. If a portion of the Fund’s monthly distributions was 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 the 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 the 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.
NUVEEN | 11 |
Share Information (continued)
SHARE REPURCHASES
During August 2016, the Fund’s Board of Trustees reauthorized an open-market share repurchase program, allowing the Fund to repurchase an aggregate up to approximately 10% of its outstanding shares.
As of June 30, 2016, and since the inception of the Fund’s repurchase program, the Fund has cumulatively repurchased and retired its outstanding shares as shown in the accompanying table.
JMM | ||||
Shares cummulatively repurchased and retired | 1,800 | |||
Shares authorized for repurchase | 945,000 |
During the current reporting period, the Fund repurchased and retired its shares at a weighted average price per share and a weighted average discount per share as shown in the accompanying table.
JMM | ||||
Shares repurchased and retired | 1,800 | |||
Weighted average price per share repurchased and retired | $ | 7.13 | ||
Weighted average discount per share repurchased and retired | 14.62 | % |
OTHER SHARE INFORMATION
As of June 30, 2016, and during the current reporting period, the Fund’s share price was trading at premium/(discount) to its NAV as shown in the accompanying table.
NAV | $ | 8.07 | ||
Share price | $ | 7.48 | ||
Premium/(Discount) to NAV | (7.31 | )% | ||
12-month average premium/(discount) to NAV | (11.65 | )% |
12 | 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 Multi-Market Income Fund (JMM)
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. Investing in mortgage-backed securities entails credit risk, the risk that the servicer fails to perform its duties, liquidity risks, interest rate risks, structure risks, pre-payment risk, and geographical concentration risks. 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. These and other risk considerations including hedging risk are described in more detail on the Fund’s web page at www.nuveen.com/JMM.
NUVEEN | 13 |
JMM
Nuveen Multi-Market Income Fund
Performance Overview and Holding Summaries as of June 30, 2016
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 June 30, 2016
Average Annual | ||||||||||||
1-Year | 5-Year | 10-Year | ||||||||||
JMM at NAV | 1.89% | 5.12% | 6.55% | |||||||||
JMM at Share Price | 10.86% | 5.33% | 7.40% | |||||||||
JMM Blended Benchmark | 4.47% | 3.91% | 5.65% |
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.
Share Price Performance — Weekly Closing Price
14 | 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. 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. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by these national rating agencies.
Fund Allocation
(% of net assets)
Convertible Preferred Securities | 0.3% | |||
$25 Par (or similar) Retail Preferred | 0.5% | |||
Corporate Bonds | 32.3% | |||
$1,000 Par (or similar) Institutional Preferred | 0.7% | |||
Asset-Backed and Mortgage-Backed Securities | 106.9% | |||
Investment Companies | 0.7% | |||
Sovereign Debt | 0.2% | |||
Repurchase Agreements | 1.1% | |||
Other Assets Less Liabilities | (16.1)% | |||
Net Assets Plus Reverse Repurchase Agreements | 126.6% | |||
Reverse Repurchase Agreements | (26.6)% | |||
Net Assets | 100% |
Portfolio Composition
(% of total investments)1
Asset-Backed and Mortgage-Backed Securities | 74.9% | |||
Oil, Gas & Consumable Fuels | 2.6% | |||
Diversified Telecommunication Services | 2.2% | |||
Media | 1.8% | |||
Metals & Mining | 1.4% | |||
Health Care Providers & Services | 1.4% | |||
Other | 15.0% | |||
Repurchase Agreements | 0.7% | |||
Total | 100.0% |
Portfolio Credit Quality
(% of total long-term
investments)1
AAA/U.S. Guaranteed | 23.7% | |||
AA | 8.0% | |||
A | 12.5% | |||
BBB | 14.3% | |||
BB or Lower | 25.8% | |||
N/R (not rated) | 15.2% | |||
N/A (not applicable) | 0.5% | |||
Total | 100% |
1 | Excluding investments in derivatives. |
NUVEEN | 15 |
Meeting Report
The annual meeting of shareholders was held in the offices of Nuveen Investments on April 22, 2016 for JMM; at this meeting the shareholders were asked to elect Board Members.
JMM | ||||
Common Shares | ||||
Approval of the Board Members was reached as follows: | ||||
William C. Hunter | ||||
For | 8,381,262 | |||
Withhold | 197,464 | |||
Total | 8,578,726 | |||
Judith M. Stockdale | ||||
For | 8,399,665 | |||
Withhold | 179,061 | |||
Total | 8,578,726 | |||
Carole E. Stone | ||||
For | 8,392,680 | |||
Withhold | 186,046 | |||
Total | 8,578,726 | |||
Margaret L. Wolff | ||||
For | 8,385,045 | |||
Withhold | 193,681 | |||
Total | 8,578,726 |
16 | NUVEEN |
Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of
Nuveen Multi-Market Income Fund:
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Nuveen Multi-Market Income Fund (the “Fund”) as of June 30, 2016, and the related statements of operations and cash flows for the year then ended and the statements of changes in net assets and the financial highlights for each of the years in the two-year period then ended. The financial highlights for the periods presented through June 30, 2014, were audited by other auditors whose report dated August 22, 2014, expressed an unqualified opinion on those financial highlights. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of June 30, 2016, by correspondence with the custodian and brokers or other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of June 30, 2016, the results of its operations and its cash flows for the year then ended and the changes in its net assets and the financial highlights for each of the years in the two-year period then ended, in conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
Chicago, Illinois
August 26, 2016
NUVEEN | 17 |
JMM
Nuveen Multi-Market Income Fund | ||
June 30, 2016 |
Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
LONG-TERM INVESTMENTS – 141.6% (99.3% of Total Investments) |
| |||||||||||||||||||
CONVERTIBLE PREFERRED SECURITIES – 0.3% (0.2% of Total Investments) |
| |||||||||||||||||||
Banks – 0.3% | ||||||||||||||||||||
200 | Bank of America Corporation | 7.250% | BB+ | $ | 239,000 | |||||||||||||||
Total Convertible Preferred Securities (cost $159,350) | 239,000 | |||||||||||||||||||
Shares | Description (1) | Coupon | Ratings (2) | Value | ||||||||||||||||
$25 PAR (OR SIMILAR) RETAIL PREFERRED – 0.5% (0.4% of Total Investments) |
| |||||||||||||||||||
Banks – 0.5% | ||||||||||||||||||||
16,830 | Bank of America Corporation | 4.000% | BB+ | $ | 382,546 | |||||||||||||||
Total $25 Par (or similar) Retail Preferred (cost $279,946) | 382,546 | |||||||||||||||||||
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
CORPORATE BONDS – 32.3% (22.7% of Total Investments) |
| |||||||||||||||||||
Aerospace & Defense – 0.5% | ||||||||||||||||||||
$ | 250 | DigitalGlobe Inc., 144A | 5.250% | 2/01/21 | BB | $ | 232,500 | |||||||||||||
200 | Triumph Group Inc. | 4.875% | 4/01/21 | Ba3 | 188,000 | |||||||||||||||
450 | Total Aerospace & Defense | 420,500 | ||||||||||||||||||
Automobiles – 0.2% | ||||||||||||||||||||
100 | Ford Motor Company | 7.450% | 7/16/31 | BBB | 133,658 | |||||||||||||||
Banks – 0.7% | ||||||||||||||||||||
500 | Citigroup Inc. | 4.500% | 1/14/22 | A | 552,737 | |||||||||||||||
Capital Markets – 0.8% | ||||||||||||||||||||
500 | Goldman Sachs Group, Inc. | 5.750% | 1/24/22 | A | 580,893 | |||||||||||||||
Chemicals – 1.8% | ||||||||||||||||||||
100 | Hexion Inc. | 6.625% | 4/15/20 | B3 | 83,630 | |||||||||||||||
200 | Huntsman International LLC | 4.875% | 11/15/20 | B1 | 201,000 | |||||||||||||||
200 | Kissner Milling Company Limited, 144A | 7.250% | 6/01/19 | B | 200,000 | |||||||||||||||
200 | Momentive Performance Materials Inc., (3), (4) | 8.875% | 10/15/20 | N/R | — | |||||||||||||||
200 | Momentive Performance Materials Inc. | 3.880% | 10/24/21 | B | 159,000 | |||||||||||||||
375 | NOVA Chemicals Corporation, 144A | 5.000% | 5/01/25 | BBB– | 371,250 | |||||||||||||||
150 | Platform Specialty Products Corporation, 144A | 10.375% | 5/01/21 | B+ | 151,125 | |||||||||||||||
200 | Platform Specialty Products Corporation, 144A | 6.500% | 2/01/22 | B+ | 176,000 | |||||||||||||||
1,625 | Total Chemicals | 1,342,005 | ||||||||||||||||||
Commercial Services & Supplies – 0.6% | ||||||||||||||||||||
200 | ADS Waste Holdings Inc. | 8.250% | 10/01/20 | CCC+ | 203,000 | |||||||||||||||
240 | International Lease Finance Corporation | 6.250% | 5/15/19 | BBB– | 258,564 | |||||||||||||||
440 | Total Commercial Services & Supplies | 461,564 | ||||||||||||||||||
Construction Materials – 0.3% | ||||||||||||||||||||
250 | Norbord Inc., 144A | 6.250% | 4/15/23 | Ba2 | 256,250 | |||||||||||||||
Consumer Finance – 0.2% | ||||||||||||||||||||
150 | Constellis Holdings LLC / Constellis Finance Corporation, 144A | 9.750% | 5/15/20 | B | 143,213 |
18 | NUVEEN |
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
Containers & Packaging – 0.3% | ||||||||||||||||||||
$ | 250 | Cascades Inc., 144A | 5.500% | 7/15/22 | BB– | $ | 242,813 | |||||||||||||
Diversified Financial Services – 0.5% | ||||||||||||||||||||
200 | James Hardie International Finance Limited, 144A | 5.875% | 2/15/23 | BBB– | 204,500 | |||||||||||||||
185 | Nationstar Mortgage LLC Capital Corporation | 7.875% | 10/01/20 | B+ | 173,437 | |||||||||||||||
385 | Total Diversified Financial Services | 377,937 | ||||||||||||||||||
Diversified Telecommunication Services – 3.2% | ||||||||||||||||||||
300 | AT&T, Inc. | 3.800% | 3/15/22 | A– | 319,585 | |||||||||||||||
235 | CenturyLink Inc. | 6.150% | 9/15/19 | BB+ | 249,981 | |||||||||||||||
250 | CenturyLink Inc. | 6.750% | 12/01/23 | BB+ | 245,625 | |||||||||||||||
200 | CenturyLink Inc. | 7.650% | 3/15/42 | BB+ | 169,000 | |||||||||||||||
250 | Frontier Communications Corporation | 8.500% | 4/15/20 | BB | 265,312 | |||||||||||||||
250 | GCI Inc. | 6.875% | 4/15/25 | BB– | 252,970 | |||||||||||||||
100 | IntelSat Jackson Holdings | 7.500% | 4/01/21 | Caa2 | 69,000 | |||||||||||||||
200 | Level 3 Financing Inc., 144A | 5.250% | 3/15/26 | BB | 196,000 | |||||||||||||||
275 | Qualitytech LP/QTS Finance Corp. | 5.875% | 8/01/22 | BB– | 279,125 | |||||||||||||||
390 | SBA Tower Trust, 144A | 3.598% | 4/15/43 | BBB | 392,640 | |||||||||||||||
2,450 | Total Diversified Telecommunication Services | 2,439,238 | ||||||||||||||||||
Electric Utilities – 0.4% | ||||||||||||||||||||
300 | Intergen NV, 144A | 7.000% | 6/30/23 | B+ | 212,250 | |||||||||||||||
100 | Talen Energy Supply LLC | 6.500% | 6/01/25 | B+ | 83,000 | |||||||||||||||
400 | Total Electric Utilities | 295,250 | ||||||||||||||||||
Energy Equipment & Services – 0.3% | ||||||||||||||||||||
150 | Compressco Partners LP / Compressco Finance Corporation | 7.250% | 8/15/22 | B– | 123,000 | |||||||||||||||
165 | Ensco PLC | 4.700% | 3/15/21 | BBB | 137,102 | |||||||||||||||
315 | Total Energy Equipment & Services | 260,102 | ||||||||||||||||||
Food & Staples Retailing – 0.4% | ||||||||||||||||||||
100 | Albersons Cos LLC/Safeway Inc./New Albertson’s Inc./Albertson’s LLC, 144A | 6.625% | 6/15/24 | B+ | 103,250 | |||||||||||||||
250 | Pomegranate Merger Sub, Inc., 144A | 9.750% | 5/01/23 | B | 234,844 | |||||||||||||||
350 | Total Food & Staples Retailing | 338,094 | ||||||||||||||||||
Food Products – 0.4% | ||||||||||||||||||||
200 | Pilgrim’s Pride Corporation, 144A | 5.750% | 3/15/25 | BB+ | 199,500 | |||||||||||||||
100 | Pinnacle Foods Inc., 144A | 5.875% | 1/15/24 | B+ | 104,625 | |||||||||||||||
300 | Total Food Products | 304,125 | ||||||||||||||||||
Gas Utilities – 0.8% | ||||||||||||||||||||
175 | AmeriGas Finance LLC | 7.000% | 5/20/22 | Ba2 | 184,733 | |||||||||||||||
300 | Ferrellgas LP | 6.750% | 1/15/22 | B+ | 273,000 | |||||||||||||||
150 | Suburban Propane Partners LP | 5.750% | 3/01/25 | BB– | 147,375 | |||||||||||||||
625 | Total Gas Utilities | 605,108 | ||||||||||||||||||
Health Care Equipment & Supplies – 0.4% | ||||||||||||||||||||
350 | Tenet Healthcare Corporation | 6.875% | 11/15/31 | B– | 282,188 | |||||||||||||||
Health Care Providers & Services – 1.9% | ||||||||||||||||||||
300 | Acadia Healthcare | 5.625% | 2/15/23 | B | 294,000 | |||||||||||||||
300 | Community Health Systems, Inc. | 6.875% | 2/01/22 | B+ | 262,500 | |||||||||||||||
300 | Iasis Healthcare Capital Corporation | 8.375% | 5/15/19 | CCC+ | 288,187 |
NUVEEN | 19 |
JMM | Nuveen Multi-Market Income Fund | |||
Portfolio of Investments (continued) | June 30, 2016 |
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
Health Care Providers & Services (continued) | ||||||||||||||||||||
$ | 275 | Kindred Healthcare Inc. | 6.375% | 4/15/22 | B– | $ | 245,437 | |||||||||||||
400 | Select Medical Corporation | 6.375% | 6/01/21 | B– | 384,000 | |||||||||||||||
1,575 | Total Health Care Providers & Services | 1,474,124 | ||||||||||||||||||
Hotels, Restaurants & Leisure – 0.3% | ||||||||||||||||||||
200 | Wynn Macau Limited, 144A | 5.250% | 10/15/21 | BB | 194,560 | |||||||||||||||
Household Durables – 1.3% | ||||||||||||||||||||
250 | Brookfield Residential Properties Inc., 144A | 6.500% | 12/15/20 | B+ | 249,375 | |||||||||||||||
250 | KB Home | 7.000% | 12/15/21 | B+ | 251,250 | |||||||||||||||
250 | PulteGroup Inc. | 4.250% | 3/01/21 | BBB– | 257,750 | |||||||||||||||
200 | William Lyon Homes Incorporated | 8.500% | 11/15/20 | B– | 205,500 | |||||||||||||||
950 | Total Household Durables | 963,875 | ||||||||||||||||||
Independent Power & Renewable Electricity Producers – 0.3% | ||||||||||||||||||||
255 | GenOn Energy Inc. | 9.500% | 10/15/18 | CCC+ | 202,725 | |||||||||||||||
Insurance – 0.2% | ||||||||||||||||||||
190 | Genworth Holdings Inc. | 4.800% | 2/15/24 | Ba3 | 142,025 | |||||||||||||||
IT Services – 0.5% | ||||||||||||||||||||
350 | Zayo Group LLC / Zayo Capital Inc. | 6.000% | 4/01/23 | B– | 357,000 | |||||||||||||||
Machinery – 0.2% | ||||||||||||||||||||
200 | BlueLine Rental Finance Corporation, 144A | 7.000% | 2/01/19 | B+ | 172,000 | |||||||||||||||
Marine – 0.1% | ||||||||||||||||||||
85 | Navios South American Logistics Inc., Finance US Inc., 144A | 7.250% | 5/01/22 | B– | 59,925 | |||||||||||||||
Media – 2.5% | ||||||||||||||||||||
200 | Altice S.A, 144A | 7.750% | 5/15/22 | B | 202,000 | |||||||||||||||
300 | Charter Communications Operating LLC/ Charter Communications Operating Capital Corporation, 144A | 4.908% | 7/23/25 | BBB | 326,969 | |||||||||||||||
250 | CSC Holdings Inc. | 8.625% | 2/15/19 | B+ | 275,000 | |||||||||||||||
300 | Numericable Group SA, 144A | 7.375% | 5/01/26 | B+ | 296,625 | |||||||||||||||
200 | Quebecor Media Inc. | 5.750% | 1/15/23 | B+ | 203,000 | |||||||||||||||
250 | Tribune Media Company | 5.875% | 7/15/22 | BB– | 248,750 | |||||||||||||||
350 | WMG Acquisition Group, 144A | 6.000% | 1/15/21 | Ba3 | 360,500 | |||||||||||||||
1,850 | Total Media | 1,912,844 | ||||||||||||||||||
Metals & Mining – 2.0% | ||||||||||||||||||||
120 | Alcoa Inc. | 5.400% | 4/15/21 | BBB– | 127,350 | |||||||||||||||
175 | Allegheny Technologies Inc. | 5.950% | 1/15/21 | B | 145,250 | |||||||||||||||
300 | Eldorado Gold Corporation, 144A | 6.125% | 12/15/20 | BB– | 300,000 | |||||||||||||||
500 | Freeport McMoRan, Inc. | 3.550% | 3/01/22 | BBB– | 440,000 | |||||||||||||||
200 | Lundin Mining Corporation, 144A | 7.500% | 11/01/20 | BB– | 204,000 | |||||||||||||||
300 | Vale Overseas Limited | 4.375% | 1/11/22 | BBB | 281,160 | |||||||||||||||
1,595 | Total Metals & Mining | 1,497,760 | ||||||||||||||||||
Multiline Retail – 0.2% | ||||||||||||||||||||
150 | J.C. Penney Company Inc. | 8.125% | 10/01/19 | B+ | 155,437 | |||||||||||||||
Oil, Gas & Consumable Fuels – 3.6% | ||||||||||||||||||||
120 | Calumet Specialty Products | 7.625% | 1/15/22 | CCC+ | 84,900 | |||||||||||||||
150 | Energy Transfer Equity LP | 5.500% | 6/01/27 | BB+ | 141,000 | |||||||||||||||
150 | EnLink Midstream Partners LP | 4.400% | 4/01/24 | BBB– | 140,767 | |||||||||||||||
200 | Genesis Energy LP | 5.750% | 2/15/21 | B+ | 189,000 |
20 | NUVEEN |
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
Oil, Gas & Consumable Fuels (continued) | ||||||||||||||||||||
$ | 215 | Gibson Energy, 144A | 6.750% | 7/15/21 | BB | $ | 213,925 | |||||||||||||
250 | NGL Energy Partners LP/Fin Co | 5.125% | 7/15/19 | BB– | 227,500 | |||||||||||||||
350 | Northern Tier Energy LLC | 7.125% | 11/15/20 | BB– | 356,125 | |||||||||||||||
100 | Oasis Petroleum Inc. | 6.875% | 3/15/22 | B+ | 92,500 | |||||||||||||||
175 | Rose Rock Midstream LP / Rose Rock Finance Corporation | 5.625% | 7/15/22 | B | 154,000 | |||||||||||||||
300 | Sunoco LP / Sunoco Finance Corp., 144A | 6.250% | 4/15/21 | BB | 300,561 | |||||||||||||||
250 | Targa Resources Inc. | 5.000% | 1/15/18 | BB– | 254,375 | |||||||||||||||
500 | Transocean Inc. | 4.300% | 10/15/22 | BB– | 353,750 | |||||||||||||||
300 | Western Refining Inc. | 6.250% | 4/01/21 | B | 273,000 | |||||||||||||||
3,060 | Total Oil, Gas & Consumable Fuels | 2,781,403 | ||||||||||||||||||
Paper & Forest Products – 1.0% | ||||||||||||||||||||
250 | Domtar Corporation | 4.400% | 4/01/22 | BBB– | 259,269 | |||||||||||||||
200 | Mercer International Inc. | 7.750% | 12/01/22 | B+ | 200,000 | |||||||||||||||
200 | Millar Western Forest Products Ltd | 8.500% | 4/01/21 | B– | 92,000 | |||||||||||||||
300 | Resolute Forest Products | 5.875% | 5/15/23 | BB– | 236,250 | |||||||||||||||
950 | Total Paper & Forest Products | 787,519 | ||||||||||||||||||
Personal Products – 0.3% | ||||||||||||||||||||
250 | Albea Beauty Holdings SA, 144A | 8.375% | 11/01/19 | B | 262,500 | |||||||||||||||
Real Estate Investment Trust – 1.5% | ||||||||||||||||||||
300 | CommomWealth REIT | 5.875% | 9/15/20 | BBB– | 333,137 | |||||||||||||||
250 | iStar Inc. | 7.125% | 2/15/18 | B+ | 256,250 | |||||||||||||||
200 | Realogy Group LLC / Realogy Co-Issuer Corporation, 144A | 5.250% | 12/01/21 | B | 204,750 | |||||||||||||||
320 | Vereit Operating Partner | 3.000% | 2/06/19 | BB+ | 320,400 | |||||||||||||||
1,070 | Total Real Estate Investment Trust | 1,114,537 | ||||||||||||||||||
Real Estate Management & Development – 0.8% | ||||||||||||||||||||
250 | Kennedy-Wilson Holdings Incorporated | 5.875% | 4/01/24 | BB– | 243,750 | |||||||||||||||
350 | Mattamy Group Corporation, 144A | 6.500% | 11/15/20 | BB | 336,000 | |||||||||||||||
600 | Total Real Estate Management & Development | 579,750 | ||||||||||||||||||
Road & Rail – 0.6% | ||||||||||||||||||||
200 | Avis Budget Car Rental, 144A | 6.375% | 4/01/24 | B+ | 198,000 | |||||||||||||||
300 | Watco Companies LLC Finance, 144A | 6.375% | 4/01/23 | B | 297,000 | |||||||||||||||
500 | Total Road & Rail | 495,000 | ||||||||||||||||||
Software – 1.4% | ||||||||||||||||||||
1,000 | Computer Sciences Corporation | 4.450% | 9/15/22 | BBB | 1,066,202 | |||||||||||||||
Specialty Retail – 0.2% | ||||||||||||||||||||
155 | L Brands, Inc. | 6.875% | 11/01/35 | BB+ | 156,938 | |||||||||||||||
Technology Hardware, Storage & Peripherals – 0.2% | ||||||||||||||||||||
175 | NCR Corporation | 4.625% | 2/15/21 | BB | 173,250 | |||||||||||||||
Textiles, Apparel & Luxury Goods – 0.3% | ||||||||||||||||||||
225 | Levi Strauss & Company | 5.000% | 5/01/25 | BB | 226,125 | |||||||||||||||
Thrifts & Mortgage Finance – 0.3% | ||||||||||||||||||||
250 | Radian Group Inc. | 7.000% | 3/15/21 | BB– | 267,345 | |||||||||||||||
Wireless Telecommunication Services – 0.8% | ||||||||||||||||||||
200 | Digicel Limited, 144A | 6.000% | 4/15/21 | B1 | 172,500 | |||||||||||||||
275 | FairPoint Communications Inc., 144A | 8.750% | 8/15/19 | B | 270,875 |
NUVEEN | 21 |
JMM | Nuveen Multi-Market Income Fund | |||
Portfolio of Investments (continued) | June 30, 2016 |
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
Wireless Telecommunication Services (continued) | ||||||||||||||||||||
$ | 200 | Sprint Corporation | 7.250% | 9/15/21 | B+ | $ | 170,500 | |||||||||||||
675 | Total Wireless Telecommunication Services | 613,875 | ||||||||||||||||||
$ | 25,750 | Total Corporate Bonds (cost $25,475,661) | 24,692,394 | |||||||||||||||||
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
$1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 0.7% (0.5% of Total Investments) |
| |||||||||||||||||||
Banks – 0.4% | ||||||||||||||||||||
$ | 100 | Lloyd’s Banking Group PLC | 7.500% | N/A (5) | BB+ | $ | 97,750 | |||||||||||||
200 | Societe Generale, 144A | 7.875% | N/A (5) | BB+ | 185,500 | |||||||||||||||
Total Banks | 283,250 | |||||||||||||||||||
Insurance – 0.3% | ||||||||||||||||||||
225 | Sirius International Group Limited, 144A | 7.506% | N/A (5) | BB+ | 225,844 | |||||||||||||||
Total $1,000 Par (or similar) Institutional Preferred (cost $511,540) | 509,094 | |||||||||||||||||||
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES – 106.9% (74.9% of Total Investments) |
| |||||||||||||||||||
$ | 1,233 | 321 Henderson Receivables LLC, Series 2012-1A, 144A | 7.140% | 2/15/67 | A3 | $ | 1,413,931 | |||||||||||||
392 | 321 Henderson Receivables LLC., Series 2010-1A, 144A | 9.310% | 7/15/61 | Aa2 | 479,239 | |||||||||||||||
500 | 321 Henderson Receivables Trust Series 2012-2A, 144A | 6.770% | 10/17/61 | Baa1 | 560,888 | |||||||||||||||
359 | ACE Securities Corporation, Manufactured Housing Trust Series 2003-MH1, 144A | 6.500% | 8/15/30 | AA | 400,506 | |||||||||||||||
750 | American Homes 4 Rent, Series 2015-SFR2, 144A | 5.036% | 10/17/45 | Baa2 | 796,153 | |||||||||||||||
1,738 | American Homes 4 Rent, Series 2015-SFR2, 144A | 0.000% | 10/17/45 | N/R | 2 | |||||||||||||||
405 | AmeriCold LLC Trust, Series 2010, 144A | 6.811% | 1/14/29 | A+ | 456,415 | |||||||||||||||
220 | Bank of America Commercial Mortgage Inc. , Commercial Mortgage Pass-Through Certificates, Series 2015-UBS7 | 3.167% | 9/15/48 | BBB– | 164,149 | |||||||||||||||
132 | Bank of America Funding Trust, Mortgage Pass-Through Certificates, Series 2007-4 | 5.500% | 6/25/37 | C | 27,075 | |||||||||||||||
371 | Bank of America Funding Trust, Series 2003-3 | 4.750% | 10/25/18 | AA+ | 372,062 | |||||||||||||||
262 | Barclays BCAP LLC Trust, Resecuritized Series 2009-RR14, 144A | 6.000% | 5/26/37 | BBB | 272,010 | |||||||||||||||
500 | Barclays Commercial Mortgage, Mortgage Pass-Through Certificates, Series 2015-STP, 144A | 4.284% | 9/10/28 | BBB– | 502,687 | |||||||||||||||
147 | Bayview Financial Acquisition Trust 2003-AA, 144A | 6.072% | 2/25/33 | AA | 149,093 | |||||||||||||||
150 | Bayview Financial Acquisition Trust Series 2006C | 5.852% | 11/28/36 | CCC | 146,120 | |||||||||||||||
160 | Bayview Financial Acquisition Trust, Series 2006-C | 5.638% | 11/28/36 | Ba1 | 158,791 | |||||||||||||||
495 | Bayview Financial Acquisition Trust, Series 2006-D | 6.096% | 12/28/36 | B | 440,375 | |||||||||||||||
250 | Bayview Financial Acquisition Trust, Series 2006-D | 5.932% | 12/28/36 | A2 | 243,879 | |||||||||||||||
14 | Bayview Financial Acquisition Trust, Series 2006-D | 5.660% | 12/28/36 | Aaa | 14,391 | |||||||||||||||
131 | Bayview Financial Acquisition Trust, Series 2007-A | 6.205% | 5/28/37 | AA+ | 135,927 | |||||||||||||||
700 | Bayview Financial Mortgage Pass-Through Trust, Mortgage Pass-Through Certificate Series 2005-D | 5.500% | 12/28/35 | BB+ | 692,292 | |||||||||||||||
73 | Bayview Financial Mortgage Pass-Through Trust, Mortgage Pass-Through Certificate Series 2006-A | 5.704% | 2/28/41 | AAA | 86,317 | |||||||||||||||
500 | CAM Mortgage Trust 2015-1, 144A | 4.750% | 7/15/64 | N/R | 491,200 | |||||||||||||||
500 | CarFinance Capital Auto Trust, Automobile Receivables-Backed Notes, Series 2013-1, 144A, 144A | 3.450% | 3/15/19 | Aa3 | 503,291 | |||||||||||||||
213 | Chase Funding Mortgage Loan Asset-Backed Certificates, Series 2003-3 | 4.660% | 3/25/33 | BBB– | 218,233 | |||||||||||||||
500 | Citigroup Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2006-CD3 | 5.688% | 10/15/48 | B– | 301,660 | |||||||||||||||
580 | Commercial Mortgage Pass-Through Certificates, Series 2014-SAVA, 144A | 3.535% | 6/15/34 | BBB | 565,315 |
22 | NUVEEN |
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES (continued) |
| |||||||||||||||||||
$ | 275 | Commercial Mortgage Pass-Through Certificates 2015-CR22 | 4.127% | 3/10/48 | A– | $ | 273,982 | |||||||||||||
210 | Commercial Mortgage Pass-Through Certificates, Series 2015-CR26 | 4.495% | 10/10/48 | A– | 205,279 | |||||||||||||||
256 | CountryWide Alternative Loan Trust 2005-86CB A10 | 5.500% | 2/25/36 | Caa3 | 210,718 | |||||||||||||||
452 | Countrywide Alternative Loan Trust, Mortgage Pass-Through Certificates, Series 2004-J1 | 6.000% | 2/25/34 | A+ | 456,374 | |||||||||||||||
187 | Countrywide Alternative Loan Trust, Mortgage Pass-Through Certificates, Series 2004-J2 | 6.500% | 3/25/34 | A+ | 194,238 | |||||||||||||||
229 | Countrywide Alternative Loan Trust, Mortgage Pass-Through Certificates, Series 2005-47CB | 5.500% | 10/25/35 | Caa3 | 190,284 | |||||||||||||||
813 | Countrywide Alternative Loan Trust, Mortgage Pass-Through Certificates, Series 2007-6 A4 | 5.750% | 4/25/47 | Ca | 653,353 | |||||||||||||||
47 | Countrywide Asset Backed Certificates, Series 2007-4 A2 | 5.368% | 4/25/47 | Caa1 | 45,616 | |||||||||||||||
596 | Credit Suisse Commercial Mortgage Trust 2009-3R, 144A | 6.000% | 1/27/37 | A | 607,849 | |||||||||||||||
346 | Credit Suisse CSMC Mortgage-Backed Trust, Pass-Through Certificates, Series 2006-7 | 6.000% | 8/25/36 | Caa3 | 291,857 | |||||||||||||||
636 | Credit Suisse First Boston Mortgage Securities Corporation, Mortgage-Backed Pass-Through Certificates, Series 2003-8 | 6.178% | 4/25/33 | A | 634,029 | |||||||||||||||
646 | Credit Suisse First Boston Mortgage Securities Corporation, Mortgage-Backed Pass-Through Certificates, Series 2005-11 6A7 | 6.000% | 12/25/35 | D | 151,003 | |||||||||||||||
356 | Credit Suisse First Boston Mortgage Securities, Home Equity Mortgage Pass- Through Certificates, Series 2004-6 | 5.821% | 4/25/35 | B1 | 361,354 | |||||||||||||||
999 | Credit-Based Asset Servicing and Securitization Pool 2007-SP1, 144A | 6.020% | 12/25/37 | A+ | 1,040,485 | |||||||||||||||
9 | Fannie Mae Mortgage Pool, (6) | 7.000% | 7/01/17 | Aaa | 8,793 | |||||||||||||||
24 | Fannie Mae Mortgage Pool, (6) | 5.000% | 11/01/18 | Aaa | 25,254 | |||||||||||||||
55 | Fannie Mae Mortgage Pool, (6) | 5.000% | 2/01/21 | Aaa | 57,727 | |||||||||||||||
1,327 | Fannie Mae Mortgage Pool, (6) | 3.500% | 12/01/26 | Aaa | 1,407,050 | |||||||||||||||
1,268 | Fannie Mae Mortgage Pool, (6) | 3.500% | 1/01/27 | Aaa | 1,345,574 | |||||||||||||||
— | (7) | Fannie Mae Mortgage Pool | 3.222% | 7/01/27 | Aaa | 149 | ||||||||||||||
54 | Fannie Mae Mortgage Pool, (6) | 6.000% | 5/01/29 | Aaa | 62,489 | |||||||||||||||
27 | Fannie Mae Mortgage Pool, (6) | 7.000% | 9/01/31 | Aaa | 30,854 | |||||||||||||||
34 | Fannie Mae Mortgage Pool, (6) | 5.500% | 6/01/33 | Aaa | 39,017 | |||||||||||||||
96 | Fannie Mae Mortgage Pool, (6) | 6.000% | 1/01/34 | Aaa | 109,550 | |||||||||||||||
167 | Fannie Mae Mortgage Pool, (6) | 5.500% | 2/01/34 | Aaa | 191,802 | |||||||||||||||
130 | Fannie Mae Mortgage Pool, (6) | 6.000% | 3/01/34 | Aaa | 146,989 | |||||||||||||||
113 | Fannie Mae Mortgage Pool, (6) | 6.000% | 1/01/35 | Aaa | 130,303 | |||||||||||||||
76 | Fannie Mae Mortgage Pool, (6) | 5.000% | 7/01/35 | Aaa | 83,892 | |||||||||||||||
39 | Fannie Mae Mortgage Pool, (6) | 5.500% | 3/01/36 | Aaa | 44,349 | |||||||||||||||
127 | Fannie Mae Mortgage Pool, (6) | 6.000% | 6/01/36 | Aaa | 146,288 | |||||||||||||||
122 | Fannie Mae Mortgage Pool, (6) | 5.500% | 4/01/37 | Aaa | 137,558 | |||||||||||||||
141 | Fannie Mae Mortgage Pool, (6) | 5.000% | 6/01/37 | Aaa | 156,364 | |||||||||||||||
123 | Fannie Mae Mortgage Pool, (6) | 5.500% | 6/01/38 | Aaa | 138,039 | |||||||||||||||
2,142 | Fannie Mae Mortgage Pool, (6) | 3.500% | 2/01/44 | Aaa | 2,262,018 | |||||||||||||||
130 | Fannie Mae REMIC Pass-Through Certificates | 6.284% | 2/25/42 | Aaa | 155,110 | |||||||||||||||
626 | Fannie Mae REMIC Pass-Through Certificates | 4.104% | 12/25/42 | AAA | 232,376 | |||||||||||||||
754 | Fannie Mae REMIC Pass-Through Certificates | 5.444% | 7/25/44 | Aaa | 141,685 | |||||||||||||||
2,975 | Fannie Mae TBA Mortgage Pool, (MDR), (WI/DD) | 4.500% | TBA | N/R | 3,245,365 | |||||||||||||||
4,605 | Fannie Mae TBA Mortgage Pool, (MDR), (WI/DD) | 4.000% | TBA | N/R | 4,932,117 | |||||||||||||||
2,000 | Fannie Mae TBA Mortgage Pool, (MDR), (WI/DD) | 3.500% | TBA | N/R | 2,107,422 | |||||||||||||||
2,500 | Fannie Mae TBA Mortgage Pool, (MDR), (WI/DD) | 3.000% | TBA | N/R | 2,589,649 | |||||||||||||||
3,931 | Federal Home Loan Mortgage Corporation, Mortgage Pool, (6) | 3.000% | 4/01/43 | Aaa | 4,083,440 | |||||||||||||||
2,777 | Freddie Mac Gold Mortgage Pool, (6) | 3.000% | 1/01/29 | Aaa | 2,916,486 | |||||||||||||||
3,195 | Freddie Mac Gold Mortgage Pool, (6) | 3.000% | 6/01/46 | Aaa | 3,314,964 | |||||||||||||||
36 | Freddie Mac Mortgage Pool, Various, (6) | 6.500% | 11/01/28 | Aaa | 42,169 | |||||||||||||||
1,891 | Freddie Mac Mortgage Pool, (6) | 3.500% | 1/01/44 | Aaa | 1,994,352 | |||||||||||||||
1,835 | Freddie Mac Mortgage Pool, (6) | 3.500% | 2/01/44 | Aaa | 1,935,286 | |||||||||||||||
229 | Freddie Mac Mortgage Trust 2013-KF02, 144A | 3.446% | 12/25/45 | AAA | 226,040 | |||||||||||||||
255 | Freddie Mac Mortgage Trust, Multifamily Mortgage Pass-Through Certificates, Series 2012-K706, 144A | 4.028% | 11/25/44 | AA+ | 264,306 | |||||||||||||||
500 | Freddie Mac Mortgage Trust, Multifamily Mortgage Pass-Through Certificates, Series 2012-K706, 144A | 4.028% | 11/25/44 | AA+ | 513,828 | |||||||||||||||
282 | Freddie Mac Mortgage Trust, Multifamily Mortgage Pass-Through Certificates, Series 2012-K708, 144A | 3.751% | 2/25/45 | Aaa | 290,965 |
NUVEEN | 23 |
JMM | Nuveen Multi-Market Income Fund | |||
Portfolio of Investments (continued) | June 30, 2016 |
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES (continued) |
| |||||||||||||||||||
$ | 500 | Freddie Mac Mortgage Trust, Multifamily Mortgage Pass-Through Certificates, Series 2012-K708, 144A | 3.751% | 2/25/45 | Aaa | $ | 499,644 | |||||||||||||
750 | Freddie Mac Mortgage Trust, Multifamily Mortgage Pass-Through Certificates, Series 2012-K709, 144A | 3.741% | 4/25/45 | Aaa | 767,005 | |||||||||||||||
750 | Freddie Mac Mortgage Trust, Multifamily Mortgage Pass-Through Certificates, Series 2013-K712, 144A | 3.369% | 5/25/45 | Aaa | 761,416 | |||||||||||||||
250 | Freddie Mac MultiFamily Mortgage Trust, Structured Pass-Through Certificates, Series 2015-K714, 144A | 3.849% | 1/25/47 | AAA | 245,296 | |||||||||||||||
500 | GMAT Trust Mortgage Pool 2013-1A, 144A | 5.000% | 11/25/43 | N/R | 475,585 | |||||||||||||||
1,000 | Goldman Sachs Mortgage Securities Corporation II, Commercial Mortgage Pass-Through Certificates, Series 2014-GSFL, 144A | 2.685% | 7/15/31 | A– | 973,789 | |||||||||||||||
122 | Goldman Sachs Mortgage Securities Corporation, GSMPS Mortgage Pass-Through Certificates, Series 2001-2, 144A | 7.500% | 6/19/32 | B | 123,990 | |||||||||||||||
825 | Goldman Sachs Mortgage Securities Corporation, GSMPS Mortgage Pass-Through Certificates, Series 2003-3, 144A | 7.000% | 6/25/43 | BBB | 868,949 | |||||||||||||||
1,295 | Goldman Sachs Mortgage Securities Corporation, GSMPS Mortgage Pass-Through Certificates, Series 2006-RP2 B1 | 6.020% | 4/25/36 | CC | 169,503 | |||||||||||||||
488 | Goldman Sachs Mortgage Securities Corporation, GSMPS Mortgage Pass-Through Certificates, Series 2006-RP2 B2 | 6.032% | 4/25/36 | C | 17,599 | |||||||||||||||
472 | Goldman Sachs Mortgage Securities Corporation, Mortgage Pass-Through Certificates, Series 2003-1 B2, (3) | 6.643% | 3/25/43 | C | 5 | |||||||||||||||
94 | Goldman Sachs Mortgage Securities Corporation, Mortgage Pass-Through Certificates, Series 2003-10 1A1 | 2.707% | 10/25/33 | BBB+ | 93,572 | |||||||||||||||
451 | Goldman Sachs Mortgage Securities Corporation, Mortgage Pass-Through Certificates, Series 2005-RP2 1A2, 144A | 7.500% | 3/25/35 | B1 | 488,642 | |||||||||||||||
440 | Goldman Sachs Mortgage Securities Corporation, Mortgage Pass-Through Certificates, Series 2005-RP3 1A2, 144A | 7.500% | 9/25/35 | B1 | 478,377 | |||||||||||||||
500 | Goldman Sachs Mortgage Securities Trust, Mortgage Pass-Through Certificates, Series 2015-GC32 | 3.345% | 7/10/48 | BBB– | 377,177 | |||||||||||||||
71 | Government National Mortgage Association Pool, (6) | 2.000% | 12/20/22 | Aaa | 72,650 | |||||||||||||||
320 | Government National Mortgage Association Pool, (6) | 5.500% | 8/15/33 | Aaa | 371,809 | |||||||||||||||
219 | Government National Mortgage Association Pool, (6) | 6.000% | 7/15/34 | Aaa | 260,028 | |||||||||||||||
1,210 | Green Tree Agency Advance Funding Trust, Manufactured Housing Contract Pass-Through Certificates, Series 2015-T2, 144A | 4.669% | 10/15/48 | BBB | 1,212,311 | |||||||||||||||
335 | Impac Secured Assets Corporation, Mortgage Pass-Through Certificates, Series 2000-3 | 8.000% | 10/25/30 | CCC | 287,096 | |||||||||||||||
138 | IndyMac MBS Inc., Residential Asset Securitization Trust, Mortgage Pass-Through Certificates, Series 2004-A2 | 4.000% | 5/25/34 | A+ | 137,437 | |||||||||||||||
401 | JP Morgan Alternative Loan Trust 2006-S1, Mortgage Pass-Through Certificates | 6.500% | 3/25/36 | D | 326,025 | |||||||||||||||
750 | JP Morgan Chase Commercial Mortgage Securities Corporation, Commercial Mortgage Pass-Through Certificates, Series 2011-C4 C, 144A | 5.393% | 7/15/46 | A | 824,743 | |||||||||||||||
132 | Lavender Trust, Mortgage Pass-Through Certificates, Series 2010-R10A, 144A | 6.250% | 9/26/36 | N/R | 131,773 | |||||||||||||||
126 | Lehman ABS Manufactured Housing Contract Asset Backed Certificates, Series 2001B | 4.350% | 4/15/40 | AA | 127,446 | |||||||||||||||
27 | Lehman Mortgage Trust, Mortgage Pass-Through Certificates, Series 2008-6 | 5.186% | 7/25/47 | BB+ | 27,302 | |||||||||||||||
469 | Master RePerforming Loan Trust 2005-1, 144A | 7.500% | 8/25/34 | B1 | 477,623 | |||||||||||||||
357 | Master Resecuritization Trust 2009-1, 144A | 6.000% | 10/25/36 | A | 368,989 | |||||||||||||||
438 | Merrill Lynch Alternative Note Asset, 2007-F1 2A7 | 6.000% | 3/25/37 | Caa3 | 334,989 | |||||||||||||||
1,421 | Mid-State Capital Corporation Trust Notes, Series 2004-1 A | 6.005% | 8/15/37 | AA+ | 1,511,236 | |||||||||||||||
1,138 | Mid-State Capital Corporation Trust Notes, Series 2005-1 | 5.745% | 1/15/40 | AA | 1,219,577 | |||||||||||||||
97 | Mid-State Trust 2004-A | 8.900% | 8/15/37 | BBB | 107,123 | |||||||||||||||
250 | Mid-State Trust 2010-1, 144A | 7.000% | 12/15/45 | A | 270,569 | |||||||||||||||
1,024 | Mid-State Trust 2010-1, 144A | 5.250% | 12/15/45 | AA | 1,086,553 | |||||||||||||||
298 | Mid-State Trust VI | 7.790% | 7/01/35 | Baa1 | 313,744 | |||||||||||||||
339 | Mid-State Trust XI | 5.598% | 7/15/38 | A+ | 353,455 | |||||||||||||||
350 | Morgan Stanley Bank of America Merrill Lynch Trust, Series 2015-C22, 144A | 4.243% | 4/15/48 | BBB– | 278,510 | |||||||||||||||
500 | Morgan Stanley Bank of America Merrill Lynch Trust, Series 2016-C28 | 4.595% | 1/15/49 | A3 | 501,197 |
24 | NUVEEN |
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES (continued) |
| |||||||||||||||||||
$ | 250 | Morgan Stanley Capital I Trust, Commercial Mortgage Pass-Through Certificates, Series 2011-C1 C, 144A | 5.433% | 9/15/47 | AA | $ | 279,171 | |||||||||||||
158 | Morgan Stanley Mortgage Loan Trust, Pass-Through Certificates, 2006-2 | 5.750% | 2/25/36 | Caa2 | 148,571 | |||||||||||||||
500 | Morgan Stanley Re REMIC Trust Series 2009-GG10, 144A | 5.794% | 8/12/45 | A | 509,791 | |||||||||||||||
361 | Mortgage Asset Securitization Transaction Inc., Alternative Loan Trust Mortgage Pass-Through Certificates Series 2004-1 | 7.000% | 1/25/34 | BBB– | 367,064 | |||||||||||||||
508 | Mortgage Asset Securitization Transaction Inc., Alternative Loan Trust Mortgage Pass-Through Certificates, 2004-5 6A1 | 7.000% | 6/25/34 | A+ | 530,721 | |||||||||||||||
95 | Mortgage Asset Securitization Transaction Inc., Mortgage Pass-Through Certificates, Series 2003-5 | 5.000% | 6/25/18 | AA | 97,369 | |||||||||||||||
460 | Mortgage Asset Securitization Transactions Inc., Mortgage Pass-Through Certificates, Series 2003-11 | 5.250% | 12/25/33 | A | 474,864 | |||||||||||||||
500 | New Residential Advance Receivable Trust , Series 2016-T1, 144A | 0.010% | 6/15/49 | BBB | 502,949 | |||||||||||||||
500 | New Residential Advance Receivable Trust, Series 2015-T2, 144A | 4.679% | 8/17/48 | BBB | 500,313 | |||||||||||||||
248 | New Residential Mortgage Loan Trust, Mortgage Pass-Through Certificates, Series 2014-2A, 144A | 3.750% | 5/25/54 | AAA | 257,065 | |||||||||||||||
59 | Oakwood Mortgage Investors Inc., Series 1999-A | 6.090% | 4/15/29 | A1 | 60,857 | |||||||||||||||
500 | OMART Receivables Trust, Series 2015-T3, 144A | 4.687% | 11/15/47 | BBB | 501,000 | |||||||||||||||
211 | Origen Manufactured Housing Contract Trust Collateralized Notes Series 2005A | 5.410% | 6/15/36 | AAA | 215,739 | |||||||||||||||
324 | Origen Manufactured Housing Contract Trust Collateralized Notes Series 2005B | 5.990% | 1/15/37 | A+ | 332,590 | |||||||||||||||
401 | Renaissance Home Equity Loan Trust Asset Backed Certificates, Series 2005-4 A6 | 5.749% | 2/25/36 | Caa1 | 372,334 | |||||||||||||||
223 | Residential Asset Mortgage Products Inc., Mortgage Asset-Backed Pass-Through Certificates, Series 2003-SL1 M2, (3) | 7.361% | 4/25/31 | D | 2 | |||||||||||||||
791 | Residential Asset Securities Corporation , Home Equity Mortgage Asset Backed Pass-Through Certificates, Series 2004-KS1 | 5.221% | 2/25/34 | BB+ | 818,014 | |||||||||||||||
146 | Residential Funding Mortgage Securities II, Inc., Home Loan Backed Notes Trust 2003-HI4 | 6.030% | 2/25/29 | A+ | 151,555 | |||||||||||||||
317 | Residential Funding Mortgage Trust I, 2007-S9 | 6.000% | 10/25/37 | D | 264,547 | |||||||||||||||
269 | Salomon Brothers Commercial Mortgage Trust Pass-Through VII Certificates, Series 2003-1 A2, 144A | 6.000% | 9/25/33 | BB | 265,332 | |||||||||||||||
500 | Springleaf Mortgage Loan Trust 2013-2A, 144A | 3.520% | 12/25/65 | AA | 499,506 | |||||||||||||||
801 | Springleaf Mortgage Loan Trust, Series 2013-3A, 144A | 5.000% | 9/25/57 | BBB | 801,080 | |||||||||||||||
500 | SPS Servicer Advance Receivables Trust, Series 2015-T3, 144A | 4.430% | 7/15/47 | BBB | 510,117 | |||||||||||||||
500 | V Mortgage LLC, Pass-Through Certificate , Series 2014-NPL1, 144A | 4.750% | 4/27/54 | N/R | 491,729 | |||||||||||||||
85 | Vanderbilt Acquisition Loan Trust, Series 2002-1 | 6.570% | 5/07/27 | AAA | 86,447 | |||||||||||||||
496 | Vericrest Opportunity Loan Transferee, Series 2014-NPL7, 144A | 4.750% | 8/27/57 | N/R | 479,508 | |||||||||||||||
499 | Vericrest Opportunity Loan Transferee, Series 2015-NLP4, 144A | 4.250% | 2/25/55 | N/R | 474,713 | |||||||||||||||
500 | Vericrest Opportunity Loan Transferee, Series 2015-NP13, 144A | 4.875% | 10/25/45 | N/R | 474,074 | |||||||||||||||
500 | Vericrest Opportunity Loan Transferee, Series 2015-NP14, 144A | 4.875% | 11/27/45 | N/R | 472,585 | |||||||||||||||
158 | Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-C30 | 5.246% | 12/15/43 | AAA | 159,477 | |||||||||||||||
279 | Walter Investment Management Company Capital Trust, Series 2012-AA, 144A | 4.549% | 10/16/50 | A | 280,200 | |||||||||||||||
55 | Washington Mutual Mortgage Securities Corporation, Mortgage Pass-Through Certificates, Series 2003-MS1 | 5.250% | 2/25/18 | N/R | 55,315 | |||||||||||||||
503 | Washington Mutual Mortgage Securities Corporation, Mortgage Pass-Through Certificates, Series 2003-MS4 | 5.500% | 2/25/33 | AA+ | 505,997 | |||||||||||||||
202 | Washington Mutual Mortgage Securities Corporation, Mortgage Pass-Through Certificates, Series 2003-S8 | 5.000% | 9/25/18 | AA+ | 204,003 | |||||||||||||||
48 | Washington Mutual Mortgage Securities Corporation, Mortgage Pass-Through Certificates, Series 2004-RA3 | 6.328% | 8/25/38 | AA | 50,302 | |||||||||||||||
500 | Wells Fargo Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2015-C26, 144A | 3.586% | 2/15/48 | BBB– | 346,688 | |||||||||||||||
750 | Wells Fargo-RBS Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2011-C3, 144A | 5.335% | 3/15/44 | A1 | 802,143 | |||||||||||||||
750 | Wells Fargo-RBS Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2013-C15, 144A | 4.479% | 8/15/46 | BBB– | 662,020 |
NUVEEN | 25 |
JMM | Nuveen Multi-Market Income Fund | |||
Portfolio of Investments (continued) | June 30, 2016 |
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES (continued) |
| |||||||||||||||||||
$ | 250 | WF-RBS Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2011-C2, 144A | 5.392% | 2/15/44 | Aa2 | $ | 272,847 | |||||||||||||
$ | 85,462 | Total Asset-Backed and Mortgage-Backed Securities (cost $82,244,346) |
| 81,639,374 | ||||||||||||||||
Shares | Description (1), (8) | Value | ||||||||||||||||||
INVESTMENT COMPANIES – 0.7% (0.5% of Total Investments) | ||||||||||||||||||||
32,000 | Blackrock Credit Allocation Income Trust IV | $ | 416,640 | |||||||||||||||||
7,036 | Pioneer Floating Rate Trust | 79,296 | ||||||||||||||||||
Total Investment Companies (cost $485,277) | 495,936 | |||||||||||||||||||
Principal Amount (000) | Description (1) | Coupon | Maturity | Ratings (2) | Value | |||||||||||||||
SOVEREIGN DEBT – 0.2% (0.1% of Total Investments) | ||||||||||||||||||||
Uruguay – 0.2% | ||||||||||||||||||||
$ | 123 | Republic of Uruguay | 8.000% | 11/18/22 | BBB | $ | 155,138 | |||||||||||||
$ | 123 | Total Sovereign Debt (cost $125,900) | 155,138 | |||||||||||||||||
Total Long-Term Investments (cost $109,061,320) | 108,113,482 | |||||||||||||||||||
Principal Amount (000) | Description (1) | Coupon | Maturity | Value | ||||||||||||||||
SHORT-TERM INVESTMENTS – 1.1% (0.7% of Total Investments) | ||||||||||||||||||||
REPURCHASE AGREEMENTS – 1.1% (0.7% of Total Investments) | ||||||||||||||||||||
$ | 814 | Repurchase Agreement with State Street Bank, dated 6/30/16, repurchase price $814,389, collateralized by $610,000 U.S. Treasury Bonds, 8.000%, due 11/15/21, value $836,272 | 0.010% | 7/01/16 | $ | 814,389 | ||||||||||||||
Total Short-Term Investments (cost $814,389) | 814,389 | |||||||||||||||||||
Total Investments (cost $109,875,709) – 142.7% | 108,927,871 | |||||||||||||||||||
Reverse Repurchase Agreements – (26.6)% | (20,317,000 | ) | ||||||||||||||||||
Other Assets Less Liabilities – (16.1)% (9) | (12,261,348 | ) | ||||||||||||||||||
Net Assets – 100% | $ | 76,349,523 |
Investment in Derivatives as of June 30, 2016
Futures contracts
Description | Contract Position | Number of Contracts | Contract Expiration | Notional Amount at Value | Variation Margin Receivable/(Payable) | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
U.S. Treasury 2-Year Note | Short | (2 | ) | 9/16 | $ | (438,656 | ) | $ | (281 | ) | $ | (2,880 | ) | |||||||||||
U.S. Treasury 5-Year Note | Short | (69 | ) | 9/16 | (8,429,320 | ) | (5,391 | ) | (152,221 | ) | ||||||||||||||
U.S. Treasury 10-Year Note | Short | (47 | ) | 9/16 | (6,250,266 | ) | 3,672 | (163,432 | ) | |||||||||||||||
$ | (15,118,242 | ) | $ | (2,000 | ) | $ | (318,533 | ) |
26 | 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. |
(2) | For financial reporting purposes, the ratings disclosed (not covered by the report of independent registered public accounting firm) are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. 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) | As of, or subsequent to, the end of the reporting period this security is non-income producing. Non-income producing, in the case of a fixed-income security, generally denotes that the issuer has (1) defaulted on the payment of principal or interest, (2) is under the protection of the Federal Bankruptcy Court or (3) the Fund’s Adviser has concluded that the issue is not likely to meet its future interest payment obligations and has ceased accruing additional income on the Fund’s records. |
(4) | Investment valued at fair value using methods determined in good faith by, or at the discretion of, the Board. For fair value measurement disclosure purposes, investment classified as Level 3. See Notes to Financial Statements, Note 2 – Investment Valuation and Fair Value Measurements for more information. |
(5) | Perpetual security. Maturity date is not applicable. |
(6) | Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in reverse repurchase agreements. |
(7) | Principal Amount (000) rounds to less than $1,000. |
(8) | 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. |
(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 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. |
MDR | Denotes investment is subject to dollar roll transactions. |
REIT | Real Estate Investment Trust |
TBA | To be announced. Maturity date not known prior to settlement of this transaction. |
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. |
(WI/DD) | Investment, or portion of investment, purchased on a when-issued or delayed delivery basis. |
See accompanying notes to financial statements.
NUVEEN | 27 |
Assets and Liabilities | June 30, 2016 |
Assets | ||||
Long-term investments, at value (cost $109,061,320) | $ | 108,113,482 | ||
Short-term investments, at value (cost approximates value) | 814,389 | |||
Cash | 114,129 | |||
Cash collateral at broker[1] | 128,000 | |||
Receivable for: | ||||
Dividends | 3,625 | |||
Interest | 735,034 | |||
Investments sold | 344,669 | |||
Paydowns | 6,273 | |||
Variation margin on futures contracts | 3,672 | |||
Other assets | 4,939 | |||
Total assets | 110,268,212 | |||
Liabilities | ||||
Reverse repurchase agreements | 20,317,000 | |||
Payable for: | ||||
Dividends | 318,052 | |||
Investments purchased | 13,105,378 | |||
Variation margin on futures contracts | 5,672 | |||
Accrued expenses: | ||||
Interest | 3,251 | |||
Management fees | 66,400 | |||
Trustees fees | 573 | |||
Other | 102,363 | |||
Total liabilities | 33,918,689 | |||
Net assets | $ | 76,349,523 | ||
Shares outstanding | 9,462,350 | |||
Net asset value (“NAV”) per share outstanding | $ | 8.07 | ||
Net assets consist of: | ||||
Shares, $0.01 par value per share | $ | 94,624 | ||
Paid-in surplus | 82,347,967 | |||
Undistributed (Over-distribution of) net investment income | 136,282 | |||
Accumulated net realized gain (loss) | (4,962,979 | ) | ||
Net unrealized appreciation (depreciation) | (1,266,371 | ) | ||
Net assets | $ | 76,349,523 | ||
Authorized shares | Unlimited |
(1) | Cash pledged to collateralize the net payment obligations for investments in derivatives. |
See accompanying notes to financial statements.
28 | NUVEEN |
Operations | Year Ended June 30, 2016 |
Investment Income | ||||
Dividends | $ | 71,871 | ||
Interest | 4,780,535 | |||
Total investment income | 4,852,406 | |||
Expenses | ||||
Management fees | 935,495 | |||
Interest expense | 112,097 | |||
Custodian fees | 74,887 | |||
Trustees fees | 7,243 | |||
Professional fees | 42,031 | |||
Shareholder reporting expenses | 65,943 | |||
Shareholder servicing agent fees | 8,962 | |||
Stock exchange listing fees | 7,901 | |||
Investor relations expense | 12,593 | |||
Other | 21,321 | |||
Total expenses before fee waiver/expense reimbursement | 1,288,473 | |||
Fee waiver/expense reimbursement | (296,909 | ) | ||
Net expenses | 991,564 | |||
Net investment income (loss) | 3,860,842 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) from: | ||||
Investments | (2,007,244 | ) | ||
Futures contracts | (456,958 | ) | ||
Change in net unrealized appreciation (depreciation) of: | ||||
Investments | 382,315 | |||
Futures contracts | (410,220 | ) | ||
Net realized and unrealized gain (loss) | (2,492,107 | ) | ||
Net increase (decrease) in net assets from operations | $ | 1,368,735 |
See accompanying notes to financial statements.
NUVEEN | 29 |
Changes in Net Assets |
Year Ended 6/30/16 | Year Ended 6/30/15 | |||||||
Operations | ||||||||
Net investment income (loss) | $ | 3,860,842 | $ | 4,425,847 | ||||
Net realized gain (loss) from: | ||||||||
Investments | (2,007,244 | ) | (273,820 | ) | ||||
Futures contracts | (456,958 | ) | (738,305 | ) | ||||
Change in net unrealized appreciation (depreciation) of: | ||||||||
Investments | 382,315 | (1,973,567 | ) | |||||
Futures contracts | (410,220 | ) | 42,825 | |||||
Net increase (decrease) in net assets from operations | 1,368,735 | 1,482,980 | ||||||
Distributions to Shareholders | ||||||||
From net investment income | (4,504,138 | ) | (4,542,792 | ) | ||||
Decrease in net assets from distributions to shareholders | (4,504,138 | ) | (4,542,792 | ) | ||||
Capital Share Transactions | ||||||||
Cost of shares repurchased and retired | (12,867 | ) | — | |||||
Net increase (decrease) in net assets from capital share transactions | (12,867 | ) | — | |||||
Net increase (decrease) in net assets | (3,148,270 | ) | (3,059,812 | ) | ||||
Net assets at the beginning of period | 79,497,793 | 82,557,605 | ||||||
Net assets at the end of period | $ | 76,349,523 | $ | 79,497,793 | ||||
Undistributed (Over-distribution of) net investment income at the end of period | $ | 136,282 | $ | (78,702 | ) |
See accompanying notes to financial statements.
30 | NUVEEN |
Cash Flows | Year Ended June 30, 2016 |
Cash Flows from Operating Activities: | ||||
Net Increase (Decrease) in Net Assets from Operations | $ | 1,368,735 | ||
Adjustments to reconcile the net increase (decrease) in net assets from | ||||
Purchases of investments | (188,478,810 | ) | ||
Proceeds from sales and maturities of investments | 188,470,657 | |||
Proceeds from (Purchases of) short-term investments, net | 1,453,097 | |||
Amortization (Accretion) of premiums and discounts, net | 11,572 | |||
(Increase) Decrease in: | ||||
Cash collateral at broker | 707,309 | |||
Receivable for dividends | 3,233 | |||
Receivable for interest | 76,910 | |||
Receivable for investments sold | (85,060 | ) | ||
Receivable for paydowns | 139,638 | |||
Receivable for variation margin on futures | 3,320 | |||
Other assets | (4 | ) | ||
Increase (Decrease) in: | ||||
Payable for investments purchased | (987,120 | ) | ||
Payable for variation margin on futures contracts | 5,672 | |||
Accrued interest | (6,377 | ) | ||
Accrued management fees | (13,912 | ) | ||
Accrued Trustees fees | (42 | ) | ||
Accrued other expenses | 41,891 | |||
Net realized (gain) loss from: | ||||
Investments | 2,007,244 | |||
Paydowns | 124,789 | |||
Change in net unrealized appreciation (depreciation) of investments | (382,315 | ) | ||
Net cash provided by (used in) operating activities | 4,460,427 | |||
Cash Flows from Financing Activities: | ||||
Net borrowings through reverse repurchase agreements | (314,000 | ) | ||
Cash distributions paid to shareholders | (4,538,913 | ) | ||
Cost of shares repurchased or retired | (12,867 | ) | ||
Net cash provided by (used in) financing activities | (4,865,780 | ) | ||
Net Increase (Decrease) in Cash | (405,353 | ) | ||
Cash at beginning of period | 519,482 | |||
Cash at end of period | $ | 114,129 | ||
Supplemental Disclosures of Cash Flow Information | ||||
Cash paid for interest | $ | 118,474 |
See accompanying notes to financial statements.
NUVEEN | 31 |
Highlights
Selected data for a share outstanding throughout each period:
Investment Operations | Less Distributions | |||||||||||||||||||||||||||||||||||||||||||
Beginning NAV | Net Investment Income (Loss)(a) | Net | Total | From Net Investment Income | From Accumulated Net Realized Gains | Return of Capital | Total | Discount Per Share Repurchase and Retired | Ending NAV | Ending Share Price | ||||||||||||||||||||||||||||||||||
Year Ended 6/30: | ||||||||||||||||||||||||||||||||||||||||||||
2016 | $ | 8.40 | $ | 0.41 | $ | (0.26 | ) | $ | 0.15 | $ | (0.48 | ) | $ | — | $ | — | $ | (0.48 | ) | $ | — | ** | $ | 8.07 | $ | 7.48 | ||||||||||||||||||
2015 | 8.72 | 0.47 | (0.31 | ) | 0.16 | (0.48 | ) | — | — | (0.48 | ) | — | 8.40 | 7.21 | ||||||||||||||||||||||||||||||
2014(f) | 8.34 | 0.40 | 0.39 | 0.79 | (0.41 | ) | — | — | (0.41 | ) | — | 8.72 | 7.77 | |||||||||||||||||||||||||||||||
Year Ended 8/31: | ||||||||||||||||||||||||||||||||||||||||||||
2013 | 8.49 | 0.53 | (0.12 | ) | 0.41 | (0.56 | ) | — | — | (0.56 | ) | — | 8.34 | 7.25 | ||||||||||||||||||||||||||||||
2012 | 8.42 | 0.59 | 0.10 | 0.69 | (0.60 | ) | — | (0.02 | ) | (0.62 | ) | — | 8.49 | 8.10 | ||||||||||||||||||||||||||||||
2011 | 8.37 | 0.63 | 0.08 | 0.71 | (0.66 | ) | — | — | (0.66 | ) | — | 8.42 | 7.72 |
32 | NUVEEN |
Ratios/Supplemental Data | ||||||||||||||||||||||||||||||
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(e) | |||||||||||||||||||||||
1.89 | % | 10.86 | % | $ | 76,350 | 1.68 | % | 4.66 | % | 1.30 | % | 5.05 | % | 205 | % | |||||||||||||||
1.88 | (1.24 | ) | 79,498 | 1.60 | 5.14 | 1.26 | 5.47 | 143 | ||||||||||||||||||||||
9.68 | 13.10 | 82,558 | 1.22 | * | 5.68 | * | 1.22 | * | 5.68 | * | 251 | |||||||||||||||||||
4.93 | (4.19 | ) | 78,902 | 1.18 | 6.20 | 1.18 | 6.20 | 310 | ||||||||||||||||||||||
8.56 | 13.58 | 80,366 | 1.25 | 7.05 | 1.25 | 7.05 | 260 | |||||||||||||||||||||||
8.75 | (3.15 | ) | 79,671 | 1.17 | 7.37 | 1.17 | 7.37 | 265 |
(a) | Per share Net Investment Income (Loss) is calculated using the average daily shares method. |
(b) | Total Return Based on NAV is the combination of changes in 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 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.
(c) • | Net Investment Income (Loss) ratios reflect income earned and expenses incurred on assets attributable to reverse repurchase agreements (as described in Note 3 – Portfolio Securities and Investments in Derivatives, Reverse Repurchase Agreements), where applicable. |
• | Each ratio includes the effect of all interest expenses paid and other costs related to reverse repurchase agreements, where applicable, as follows: |
Ratios of Interest Expense to Average Net Assets | ||||
Year Ended 6/30: |
| |||
2016 | 0.15 | % | ||
2015 | 0.12 | |||
2014(f) | 0.06 | * | ||
Year Ended 8/31: | ||||
2013 | 0.04 | |||
2012 | 0.06 | |||
2011 | 0.06 |
(d) | After fee waiver and/or expense reimbursement from the Adviser, where applicable. |
(e) | 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. |
(f) | For the ten months ended June 30, 2014. |
* | Annualized. |
** | Rounds to less than $0.01 per share. |
See accompanying notes to financial statements.
NUVEEN | 33 |
Financial Statements
1. General Information and Significant Accounting Policies
General Information
Fund Information
Nuveen Multi-Market Income Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended, as a diversified closed-end management investment company. The Fund’s shares are listed on the New York Stock Exchange (“NYSE”) and trade under the ticker symbol “JMM.” The Fund was organized as a Massachusetts business trust on May 27, 2014.
The end of the reporting period for the Fund is June 30, 2016, and the period covered by these Notes to Financial Statements is the fiscal year ended June 30, 2016 (the “current fiscal period”).
Investment Adviser
The Fund’s investment adviser is Nuveen Fund Advisors, LLC (the “Adviser”), a wholly-owned subsidiary of Nuveen Investments, Inc. (“Nuveen”). Nuveen is an operating division of TIAA Global Asset Management. The Adviser is responsible for the Fund’s overall investment strategy and asset allocation decisions, including the Fund’s use of leverage. The Adviser has entered into a sub-advisory agreement with Nuveen Asset Management, LLC (the “Sub-Adviser”), a subsidiary of the Adviser, under which the Sub-Adviser manages the Fund’s investment portfolio.
Investment Objective and Principal Investment Strategies
The Fund seeks to provide high monthly income consistent with prudent risk to capital. The Fund will invest primarily in debt securities, including, but not limited to, U.S. agency and privately issued mortgage-backed securities, corporate debt securities, and asset-backed securities. Under normal market conditions, at least 65% of the Fund’s total assets must be invested in securities that, at the time of purchase, are rated investment-grade or of comparable quality. No more than 35% of the Fund’s total assets may be held in high-yield issues. The Fund is authorized to borrow funds or issue senior securities in amounts not exceeding 33 1⁄3% of its total assets. The Fund may utilize derivatives including options; futures contracts; options on futures contracts; interest-rate caps, collars and floors; interest-rate, total return, and credit default swap agreements; and options on the foregoing type of swap agreements.
Significant Accounting Policies
The 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 Fund in the preparation of its 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 Fund has earmarked securities in its portfolio 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 Fund’s outstanding when-issued/delayed delivery purchase commitments were as follows:
Outstanding when-issued/delayed delivery purchase commitments | $12,865,606 |
Investment Income
Dividend income is recorded on the ex-dividend date or, for foreign securities, when information is available. 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 paydown gains and losses, if any.
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.
34 | NUVEEN |
Dividends and Distributions to Shareholders
Dividends from net investment income are declared monthly. Net realized capital gains from investment transactions, if any, are distributed to shareholders at least annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards.
Distributions to 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.
Indemnifications
Under the Fund’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts that provide general indemnifications to other parties. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
Netting Agreements
In the ordinary course of business, the Fund may enter into transactions subject to enforceable master repurchase agreements, International Swaps and Derivative Association, Inc. (“ISDA”) master agreements or other similar arrangements (“netting agreements”). Generally, the right to offset in netting agreements allows the 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, the Fund manages its cash collateral and securities collateral on a counterparty basis.
The Fund’s 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 from operations during the reporting 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 fixed-income securities are provided by an independent pricing service (“pricing service”) approved by the Fund’s Board of Trustees (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.
Investments in investment companies are valued at their respective net asset value (“NAV”) on valuation date and are generally classified as Level 1.
NUVEEN | 35 |
Notes to Financial Statements (continued)
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.
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 the 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 the Fund’s fair value measurements as of the end of the reporting period:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Long-Term Investments*: | ||||||||||||||||
Convertible Preferred Securities | $ | 239,000 | $ | — | $ | — | $ | 239,000 | ||||||||
$25 Par (or similar) Retail Preferred | 382,546 | — | — | 382,546 | ||||||||||||
Corporate Bonds | — | 24,692,394 | — | *** | 24,692,394 | |||||||||||
$1,000 Par (or similar) Institutional Preferred | — | 509,094 | — | 509,094 | ||||||||||||
Asset-Backed and Mortgage-Backed Securities | — | 81,639,374 | — | 81,639,374 | ||||||||||||
Investment Companies | 495,936 | — | — | 495,936 | ||||||||||||
Sovereign Debt | — | 155,138 | — | 155,138 | ||||||||||||
Short-Term Investments: | ||||||||||||||||
Repurchase Agreements | — | 814,389 | — | 814,389 | ||||||||||||
Investments in Derivatives: | ||||||||||||||||
Futures Contracts** | (318,533 | ) | — | — | (318,533 | ) | ||||||||||
Total | $ | 798,949 | $ | 107,810,389 | $ | — | $ | 108,609,338 |
* | Refer to the Fund’s Portfolio of Investments for industry or country classifications, where applicable. |
** | Represents net unrealized appreciation (depreciation) as reported in the Fund’s Portfolio of Investments. |
*** | Value equals zero as of the end of the reporting period. Refer to Fund’s Portfolio of Investments for securities classified as Level 3. |
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 Fund’s 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 Fund, 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. |
36 | NUVEEN |
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
Dollar Roll Transactions
The Fund is authorized to enter into dollar roll transactions (“dollar rolls”) in which the Fund purchases or sells mortgage-backed securities (“MBS”) for delivery in the future and simultaneously contracts to sell or repurchase a substantially similar (same type, coupon, and maturity) MBS on a different specified future date. Dollar rolls are identified in the Portfolio of Investments as “MDR”, when applicable. During the roll period, the Fund foregoes principal and interest paid on the MBS. The Fund is compensated by the difference between the current sales price and the lower forward price for the future purchase. Such compensation is recognized as a component of “Net realized gain (loss) from investments” on the Statement of Operations. Dollar rolls are valued daily.
Dollar rolls involve the risk that the market value of the MBS the Fund is obligated to repurchase under an agreement may decline below the repurchase price. These transactions also involve some risk to the Fund if the other party should default on its obligation and the Fund is delayed or prevented from completing the transaction. In the event that the buyer of securities under a dollar roll files for bankruptcy or becomes insolvent, the Fund’s use of proceeds of the dollar roll may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to repurchase the securities.
Repurchase Agreements
In connection with transactions in repurchase agreements, it is the 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 Fund that are subject to netting agreements as of the end of the reporting period, and the collateral delivered related to those repurchase agreements.
Counterparty | Short-Term Investments, at Value | Collateral Pledged (From) Counterparty* | Net Exposure | |||||||||
State Street Bank | $ | 814,389 | $ | (814,389 | ) | $ | — |
* | 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. |
Reverse Repurchase Agreements
In a reverse repurchase agreement, the Fund sells 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 Fund retaining the risk of loss that is associated with that security. The Fund will segregate assets determined to be liquid by the Adviser to cover its obligations under reverse repurchase agreements. Securities sold under reverse repurchase agreements are recorded and recognized as “Reverse repurchase agreements” on the Statement of Assets and Liabilities.
Interest payments made on reverse repurchase agreements are recognized as a component of “Interest expense” on the Statement of Operations. In periods of increased demand for the security, the Fund received a fee for use of the security by the counterparty, which may result in interest income to the Fund.
As of the end of the reporting period, the Fund’s outstanding balances on its reverse repurchase agreements were as follows:
Counterparty | Coupon | Principal Amount | Maturity | Value | Value and Accrued Interest | |||||||||||||||
Goldman Sachs | 0.72 | % | $ | (20,317,000 | ) | 7/25/16 | $ | (20,317,000 | ) | $ | (20,319,844 | ) |
NUVEEN | 37 |
Notes to Financial Statements (continued)
During the current fiscal period, the average daily balance outstanding and weighted average interest rate on the Fund’s reverse repurchase agreements were as follows:
Average daily balance outstanding | $19,063,082 | |||
Weighted average interest rate | 0.58 | % |
The following table presents the reverse repurchase agreements subject to netting agreements and the collateral delivered related to those reverse repurchase agreements.
Counterparty | Reverse Repurchase* Agreements | Collateral Pledged to Counterparty | Net Exposure | |||||||||
Goldman Sachs | $ | (20,319,844 | ) | $ | 19,303,852 | $ | (1,015,992 | ) |
* | Represents gross value and accrued interest for the counterparty as reported in the preceding table |
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.
Investment in Derivatives
The Fund is authorized to invest in certain derivative instruments, such as futures, options and swap contracts. The 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 Fund records derivative instruments at fair value, with changes in fair value recognized on the Statement of Operations, when applicable. Even though the Fund’s 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, 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 held by the broker to cover initial margin requirements on open futures contracts, if any, is recognized as “Cash collateral at brokers” on the Statement of Assets and Liabilities. Investments in futures contracts obligate the 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 the Fund has unrealized appreciation the clearing broker would credit the Fund’s account with an amount equal to appreciation and conversely if the 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, the 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, the Fund used U.S. Treasury futures as part of an overall portfolio construction strategy to manage portfolio duration and yield curve exposure.
The average notional amount of futures contracts outstanding during the current fiscal period was as follows:
Average notional amount of futures contracts outstanding* | $18,787,272 |
* | The average notional amount is calculated based on the absolute aggregate national amount of contracts outstanding at the beginning of the fiscal period and at the end of each quarter within the current fiscal period. |
38 | NUVEEN |
The following table presents the fair value of all futures contracts held by the Fund 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* | $ | (163,432 | ) | Payable for variation margin on futures contracts* | $ | (155,101 | ) |
* | 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 | $ | (456,958 | ) | $ | (410,220 | ) |
Market and Counterparty Credit Risk
In the normal course of business the 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 the Fund to counterparty credit risk, consist principally of cash due from counterparties on forward, option and swap transactions, when applicable. The extent of the 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.
The 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 the Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when the Fund has an unrealized loss, the Fund has instructed the custodian to pledge assets of the Fund 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
Share Transactions
Transactions in shares during the current and prior fiscal period were as follows:
Year Ended 6/30/16 | Year Ended 6/30/15 | |||||||
Shares repurchased and retired | (1,800 | ) | — | |||||
Weighted average: | ||||||||
Price per share repurchased and retired | $ | 7.13 | $ | — | ||||
Discount per share repurchased and retired | 14.62 | % | — |
5. Investment Transactions
Long-term purchases and sales (including maturities and dollar roll transactions, but excluding derivative transactions) during the current fiscal period aggregated $188,478,810 and $188,470,657 respectively.
6. Income Tax Information
The Fund intends to distribute substantially all of its net investment company taxable income 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.
NUVEEN | 39 |
Notes to Financial Statements (continued)
For all open tax years and all major taxing jurisdictions, management of the Fund 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 Fund 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.
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 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 NAV of the Fund.
As of June 30, 2016, the cost and unrealized appreciation (depreciation) of investments (excluding investments in derivatives), as determined on a federal income tax basis, were as follows:
Cost of investments | $ | 110,120,070 | ||
Gross unrealized: | ||||
Appreciation | $ | 2,973,200 | ||
Depreciation | (4,165,399 | ) | ||
Net unrealized appreciation (depreciation) of investments | $ | (1,192,199 | ) |
Permanent differences, primarily due to paydowns and bond premium amortization adjustments, resulted in reclassifications among the Fund’s components of net assets as of June 30, 2016, the Fund’s tax year end, as follows:
Paid-in surplus | $ | — | ||
Undistributed (Over-distribution of) net investment income | 858,280 | |||
Accumulated net realized gain (loss) | (858,280 | ) | ||
The tax components of undistributed net ordinary income and net long-term capital gains as of June 30, 2016, the Fund’s tax year end, were as follows: | ||||
Undistributed net ordinary income1 | $ | 697,627 | ||
Undistributed net long-term capital gains | — | |||
1 Net ordinary income consists of net taxable income derived from dividends and interest, and net short-term capital gains, if any.
|
| |||
The tax character of distributions paid during the Fund’s tax years ended June 30, 2016 and June 30, 2015, was designated for purposes of the dividends paid deduction as follows: | ||||
2016 | ||||
Distributions from net ordinary income1 | $ | 4,542,059 | ||
Distributions from net long-term capital gains | — | |||
2015 | ||||
Distributions from net ordinary income1 | $ | 4,162,893 | ||
Distributions from net long-term capital gains | 1,333 |
1 | Net ordinary income consists of net taxable income derived from dividends and interest, and net short-term capital gains, if any. |
As of June 30, 2016, the Fund’s tax year end, the Fund had unused capital losses carrying forward available for federal income tax purposes to be applied against future capital gains, if any. The capital losses are not subject to expiration.
Capital losses to be carried forward – not subject to expiration | $ 5,257,851 |
7. Management Fees and Other Transactions with Affiliates
Management Fees
The Fund’s management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Sub-Adviser is compensated for its services to the Fund from the management fees paid to the Adviser.
The Fund’s management fee consists of two components – a fund-level fee, based only on the amount of assets within the Fund, and a complex-level fee, based on the aggregate amount of all eligible fund assets managed by the Adviser. This pricing structure enables Fund shareholders to benefit from growth in the assets within the Fund as well as from growth in the amount of complex-wide assets managed by the Adviser.
40 | NUVEEN |
The annual Fund-level fee, payable monthly, is calculated according to the following schedule:
Average Daily Managed Assets* | Fund-Level Fee | |||
For the first $125 million | 0.7000 | % | ||
For the next $125 million | 0.6875 | |||
For the next $250 million | 0.6750 | |||
For the next $500 million | 0.6625 | |||
For managed assets over $1 billion | 0.6500 |
The annual complex-level fee, payable monthly, is calculated by multiplying the current complex-wide fee rate, determined according to the following schedule by the Fund’s daily managed assets:
Complex-Level Managed Asset Breakpoint Level* | Effective 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 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 June 30, 2016, the complex-level fee for the Fund was 0.1614%. |
The Adviser has agreed to waive fees and/or reimburse expenses of the Fund through September 8, 2016, so that total annual Fund operating expenses, after fee waivers and/or expense reimbursements and excluding any costs of leverage, do not exceed 1.15% of the Fund’s average net assets.
Other Transactions with Affiliates
The Fund pays 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 Fund from the Adviser or its affiliates. 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.
8. Subsequent Events
Management Fees
Effective August 1, 2016, the annual fund-level fee for the Fund, payable monthly, will be calculated according to the following schedule:
Average Daily Managed Assets | Fund-Level Fee | |||
For the first $125 million | 0.7000 | % | ||
For the next $125 million | 0.6875 | |||
For the next $150 million | 0.6750 | |||
For the next $600 million | 0.6625 | |||
For managed assets over $1 billion | 0.6500 |
NUVEEN | 41 |
Fund Information (Unaudited)
Board of Trustees | ||||||||||
William Adams IV* | Margo Cook** | Jack B. Evans | William C. Hunter | David J. Kundert | Albin F. Moschner*** | |||||
John K. Nelson | William J. Schneider | Judith M. Stockdale | Carole E. Stone | Terence J. Toth | Margaret L. Wolff |
* | Interested Board Member. |
** | Interested Board Member effective July 1, 2016. |
*** | Effective July 1, 2016. |
Fund Manager Nuveen Fund Advisors, LLC 333 West Wacker Drive Chicago, IL 60606 | Custodian State Street Bank One Lincoln Street Boston, MA 02111 | Legal Counsel Chapman and Cutler LLP Chicago, IL 60603 | Independent Registered KPMG LLP 200 East Randolph Drive Chicago, IL 60601 | Transfer Agent and State Street Bank Nuveen Funds P.O. Box 43071 Providence, Rl 02940-3071 (800) 257-8787 |
Quarterly Form N-Q Portfolio of Investments Information
The 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
The 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. The Fund has filed with the SEC the certification of its CEO and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act.
Share Repurchases
The Fund intends to repurchase, through its open-market share repurchase program, shares of its own common stock at such times and in such amounts as is deemed advisable. During the period covered by this report, the 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.
JMM | ||||
Shares repurchased | 1,800 |
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 FlNRA BrokerCheck is available to the public by calling the FINRA BrokerCheck Hotline number at (800) 289-9999 or by visiting www.FINRA.org.
42 | NUVEEN |
Used in this Report (Unaudited)
n | 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 market price and reinvested dividends and capital gains distributions, if any) over the time period being considered. |
n | Beta: A measure of the variability of the change in the share price for a fund in relation to a change in the value of the fund’s market benchmark. Securities with betas higher than 1.0 have been, and are expected to be, more volatile than the benchmark; securities with betas lower than 1.0 have been, and are expected to be, less volatile than the benchmark. |
n | 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. |
n | 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. |
n | Gross Domestic Product (GDP): The total market value of all final goods and services produced in a country/region in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports. |
n | JMM Blended Benchmark: A two index blend comprised of weightings approximating the Fund’s proposed portfolio: 25% Barclays U.S. Corporate High-Yield Index and 75% Barclays U.S. Government/Mortgage Index. 1) Barclays U.S. Corporate High-Yield Index: An unmanaged index that covers the universe of domestic fixed-rate non-investment grade debt; and 2) Barclays U.S. Government/Mortgage Index: An unmanaged index considered representative of U.S. government treasury securities and agency mortgage-back securities. Benchmark returns assume reinvestment of distributions, but do not reflect any applicable sales charges or management fees. |
n | Leverage: Leverage is created whenever a fund has investment exposure (both reward and/or risk) equivalent to more than 100% of the investment capital. |
n | 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. |
n | Regulatory Leverage: Regulatory leverage consists of preferred shares issued by or borrowings of the fund. Both of these are part of the fund’s capital structure. Regulatory leverage is subject to asset coverage limits set in the Investment Company Act of 1940. |
NUVEEN | 43 |
Easily and Conveniently
Nuveen makes reinvesting easy. A phone call is all it takes to set up your reinvestment account.
Nuveen Closed-End Funds Automatic Reinvestment Plan
Your Nuveen Closed-End Fund allows you to conveniently reinvest distributions in additional Fund shares.
By choosing to reinvest, you’ll be able to invest money regularly and automatically, and watch your investment grow through the power of compounding. Just like distributions in cash, there may be times when income or capital gains taxes may be payable on distributions that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market.
Easy and convenient
To make recordkeeping easy and convenient, each quarter you’ll receive a statement showing your total distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own.
How shares are purchased
The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the greater of the net asset value or 95% of the then-current market price. If the shares are trading at less than net asset value, shares for your account will be purchased on the open market. If the Plan Agent begins purchasing Fund shares on the open market while shares are trading below net asset value, but the Fund’s shares subsequently trade at or above their net asset value before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the uninvested portion of the distribution in newly-issued Fund shares at a price equal to the greater of the shares’ net asset value or 95% of the shares’ market value on the last business day immediately prior to the purchase date. Distributions received to purchase shares in the open market will normally be invested shortly after the distribution payment date. No interest will be paid on distributions awaiting reinvestment. Because the market price of the shares may increase before purchases are completed, the average purchase price per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the distribution had been paid in shares issued by the Fund. A pro rata portion of any applicable brokerage commissions on open market purchases will be paid by Plan participants. These commissions usually will be lower than those charged on individual transactions.
Flexible
You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change.
You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time.
Call today to start reinvesting distributions
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial advisor or call us at (800) 257-8787.
44 | NUVEEN |
Management Agreement Approval Process (Unaudited)
The Board of Trustees of the Fund (the “Board,” and each Trustee a “Board Member”), including the Board Members who are not parties to the Fund’s advisory or sub-advisory agreements or “interested persons” of any such parties (the “Independent Board Members”), is responsible for overseeing the performance of the investment adviser and sub-adviser to the Fund and determining whether to continue the Fund’s advisory agreement (the “Investment Management Agreement”) between the Fund and Nuveen Fund Advisors, LLC (the “Adviser”) and the sub-advisory agreement (the “Sub-Advisory Agreement” and, together with the Investment Management Agreement, the “Advisory Agreements”) between the Adviser and Nuveen Asset Management, LLC (the “Sub-Adviser”). Following the initial term upon the Fund’s commencement of operations, the Board reviews the Investment Management Agreement and Sub-Advisory Agreement and votes to determine whether the respective Advisory Agreement should be renewed. Accordingly, at an in-person meeting held on May 24-26, 2016 (the “May Meeting”), the Board, including a majority of the Independent Board Members, considered and approved the existing Advisory Agreements for the Fund.
During the year, the Board and its Committees met regularly to receive materials and discuss a variety of topics impacting the Fund including, among other things, overall market conditions and market performance, Fund investment performance, brokerage execution, valuation of securities, compliance matters, securities lending, leverage matters, risk management and ongoing initiatives. The Board had established several standing Committees, including the Open-end Fund Committee and Closed-end Fund Committee which permit the Board Members to delve further into the topics particularly relevant to the respective product line and enhance the Board’s effectiveness and oversight of the Fund. The Board also seeks to meet with the Sub-Adviser and its investment team at least once over a multiple year rotation through site visits. The information and knowledge the Board gained throughout the year from the Board and Committee meetings, site visits and the related materials were relevant to the Board’s evaluation of the Advisory Agreements, and the Board took such information into account in its review of the Advisory Agreements.
In addition to the materials received throughout the year, the Board received additional materials prepared specifically for its annual review of the Advisory Agreements in response to a request by independent legal counsel on behalf of the Independent Board Members. The materials addressed a variety of topics, including a description of the services provided by the Adviser and the Sub-Adviser (each, a “Fund Adviser”); a review of fund performance with a detailed focus on any performance outliers; an analysis of the investment teams; an analysis of the fees and expense ratio of the Fund, including information comparing such fees and expenses to that of a peer group; an assessment of shareholder services for the Fund and of the performance of certain service providers; a review of initiatives instituted or continued during the past year; and a review of premium/discount trends and leverage management as well as information regarding the profitability of the Fund Advisers, the compensation of portfolio managers, and compliance and risk matters.
As part of its annual review, the Board held a separate meeting on April 12-13, 2016 to review the Fund’s investment performance and consider an analysis by the Adviser of the Sub-Adviser examining, among other things, the team’s assets under management, investment performance, investment approach, and the stability and structure of the Sub-Adviser’s organization and investment team. During the review, the Independent Board Members requested and received additional information from management. Throughout the year and throughout their review of the Advisory Agreements, the Independent Board Members were assisted by independent legal counsel. The Independent Board Members met separately with independent legal counsel without management present and received a memorandum from such counsel outlining their fiduciary duties and legal standards in reviewing the Advisory Agreements. The Independent Board Members’ review of the Advisory Agreements reflected an ongoing process that incorporated the information and considerations that occurred over the years, including the most recent year, as well as the information specifically furnished for the renewal process. In deciding to renew the Advisory Agreements, the Independent Board Members did not identify a particular factor as controlling, but rather the decision reflected the comprehensive consideration of all the information presented. The following summarizes the principal factors, but not all the factors, the Board considered in its review of the Advisory Agreements and its conclusions.
NUVEEN | 45 |
Annual Investment Management Agreement Approval Process (Unaudited) (continued)
A. | Nature, Extent and Quality of Services |
In evaluating the renewal of the Advisory Agreements, the Independent Board Members received and considered information regarding the nature, extent and quality of the applicable Fund Adviser’s services provided to the Fund and the initiatives undertaken during the past year by the Adviser. The Board recognized the comprehensive set of services the Adviser provided to manage and operate the Nuveen funds, including (a) product management (such as setting dividends, positioning the product in the marketplace, maintaining and enhancing shareholder communications and reporting to the Board); (b) investment services (such as overseeing sub-advisers and other service providers; analyzing investment performance and risks; overseeing risk management and disclosure; developing and interpreting investment policies; assisting in the development of products; helping to prepare financial statements and marketing disclosures; and overseeing trade execution); (c) fund administration (such as helping to prepare fund tax returns and complete other tax compliance matters; and helping to prepare regulatory filings and shareholder reports); (d) fund Board administration (such as preparing Board materials and organizing and providing assistance for Board meetings); (e) compliance (such as helping to devise and maintain the funds’ compliance program and related testing); (f) legal support (such as helping to prepare registration statements and proxy statements, interpreting regulations and policies and overseeing fund activities); and (g) providing leverage management.
The Board reviewed the continued investment the Adviser had made in its business to continue to strengthen the breadth and quality of its services to the benefit of the Nuveen funds. The Board noted the Adviser’s additional staffing in key areas that support the funds and the Board, including in investment services, operations, closed-end fund/structured products, fund governance, compliance, fund administration, product management, and information technology. Among the enhancements to its services, the Board recognized the Adviser’s (a) expanded activities and support required as a result of regulatory developments, including in areas of compliance and reporting; (b) expanded efforts to support leverage management with a goal of seeking the most effective structure for fund shareholders given appropriate risk levels and regulatory constraints; (c) increased support for dividend management; (d) continued investment in its technical capabilities as the Adviser continued to build out a centralized fund data platform, enhance mobility and remote access capabilities, rationalize and upgrade software platforms, and automate certain regulatory liquidity determinations; (e) continued efforts to rationalize the product line through mergers, liquidations and re-positioning of Nuveen funds with the goal of increasing efficiencies, reducing costs, improving performance and addressing shareholder needs; (f) continued efforts to develop new lines of business designed to enhance the Nuveen product line and meet investor demands; and (g) continued commitment to enhance risk oversight, including the formation of the operational risk group to provide operational risk assessment, the access to platforms which provide better risk reporting to support investment teams, and the development of a new team to initially review new products and major product initiatives. The Board also recognized the Adviser’s efforts to renegotiate certain fees of other service providers which culminated in reduced expenses for all funds for custody and accounting services without diminishing the breadth and quality of the services provided. The Board considered the Chief Compliance Officer’s report regarding the Adviser’s compliance program, the Adviser’s continued development, execution and management of its compliance program, and the additions to the compliance team to support the continued growth of the Nuveen fund family and address regulatory developments.
The Board also considered information highlighting the various initiatives that the Adviser had implemented or continued during the year to enhance or support the closed-end fund product line. The Board noted the Adviser’s continued efforts during 2015 (a) to rationalize the product line through mergers designed to help reduce product overlap, offer shareholders the potential for lower fees and enhanced investor acceptance, and address persistent discounts in the secondary market; (b) to oversee and manage leverage as the Adviser facilitated the rollover of existing facilities and conducted negotiations for improved terms and pricing to reduce leverage costs; (c) to conduct capital management services including share repurchases and/or share issuances throughout the year and monitoring market conditions to capitalize on such opportunities for the closed-end funds; and (d) to implement data-driven market analytics which, among other things, provided a better analysis of the shareholder base, enhanced the ability to monitor the closed-end funds versus peers and helped to understand trading discounts. The Board also considered the quality and breadth of Nuveen’s investment relations program through which Nuveen seeks to build awareness of, and educate investors and financial advisers with respect to, Nuveen closed-end funds which may help to build an active secondary market for the closed-end fund product line.
46 | NUVEEN |
As noted, the Adviser also oversees the Sub-Adviser who primarily provides the portfolio advisory services to the Fund. The Board recognized the skill and competency of the Adviser in monitoring and analyzing the performance of the Sub-Adviser and managing the sub-advisory relationship. The Board noted that the Adviser recommended the renewal of the Sub-Advisory Agreement.
Based on their review, the Independent Board Members found that, overall, the nature, extent and quality of services provided to the Fund under each Advisory Agreement were satisfactory.
B. | The Investment Performance of the Fund and Fund Advisers |
The Board considered the long-term and short-term performance history of the Nuveen funds. As noted above, the Board reviewed fund performance at its quarterly meetings throughout the year and took into account the information derived from the discussions with representatives of the Adviser about fund performance at these meetings. The Board also considered the Adviser’s analysis of fund performance with particular focus on any performance outliers and the factors contributing to such performance and any steps the investment team had taken to address performance concerns. The Board reviewed, among other things, the Fund’s investment performance both on an absolute basis and in comparison to peer funds (the “Performance Peer Group”) and to a recognized and/or customized benchmark (i.e., generally a benchmark derived from multiple recognized benchmarks) for the quarter, one-, three- and five-year periods ending December 31, 2015, as well as performance information reflecting the first quarter of 2016.
In evaluating performance information, the Board recognized the following factors may impact the performance data as well as the consideration to be given to particular performance data:
• | The performance data reflected a snapshot in time, in this case as of the end of the most recent calendar year or quarter. A different performance period, however, could generate significantly different results. |
• | Long-term performance can be adversely affected by even one period of significant underperformance so that a single investment decision or theme had the ability to disproportionately affect long-term performance. |
• | Shareholders evaluate performance based on their own holding period which may differ from the performance period reviewed by the Board, leading to different performance results. |
• | The Board recognized the difficulty in establishing appropriate peer groups and benchmarks for certain funds, including the Fund. The Board noted that management classified the Performance Peer Groups as low, medium and high in relevancy and took the relevancy of the Performance Peer Group into account when considering the comparative performance data. If the Performance Peer Group differed somewhat from a fund, the Board recognized that the comparative performance data may be of limited value. The Board also recognized that each fund operated pursuant to its own investment objective(s), parameters and restrictions which may differ from that of the Performance Peer Group or benchmark and that these variations lead to differences in performance results. Further, for funds that utilized leverage, the Board understood that leverage during different periods could provide both benefits and risks to a portfolio as compared to an unlevered benchmark. |
In addition to the foregoing, the Independent Board Members continued to recognize the importance of secondary market trading for the shares of closed-end funds. At the quarterly meetings as well as the May Meeting, the Independent Board Members (either at the Board level or through the Closed-end Fund Committee) reviewed, among other things, the premium or discount to net asset value of the Nuveen closed-end funds as of a specified date and over various periods as well as in comparison to the premium/discount average in their respective Lipper peer category. At the May Meeting and/or prior meetings, the Independent Board Members (either at the Board level or through the Closed-end Fund Committee) reviewed, among other things, an analysis by the Adviser of the key economic, market and competitive trends that affected the closed-end fund market and Nuveen closed-end funds and considered any actions proposed periodically by the Adviser to address trading discounts of certain closed-end funds, including, among other things, share repurchases, fund reorganizations, adjusting fund investment mandates and strategies, and increasing fund awareness to investors. The Independent Board Members considered the evaluation of the premium and discount levels of the closed-end funds to be a continuing priority in their oversight of the closed-end funds.
NUVEEN | 47 |
Annual Investment Management Agreement Approval Process (Unaudited) (continued)
With respect to any Nuveen funds for which the Board has identified performance concerns, the Board monitors such funds closely until performance improves, discusses with the Adviser the reasons for such results, considers those steps necessary or appropriate to address such issues, and reviews the results of any efforts undertaken. The Board was aware, however, that shareholders chose to invest or remain invested in a fund knowing that the Adviser and the applicable sub-adviser manage the fund, knowing the fund’s investment strategy and seeking exposure to that strategy (even if the strategy was “out of favor” in the marketplace) and knowing the fund’s fee structure.
The Board noted that, although the Fund ranked in the fourth quartile its Performance Peer Group for the one-year period, the Fund ranked in the third quartile in the three- and five-year periods. In addition, although the Fund underperformed its benchmark in the one-year period, the Fund outperformed its benchmark in the three- and five-year periods. The Board determined that the Fund’s performance had been satisfactory.
C. | Fees, Expenses and Profitability |
1. | Fees and Expenses |
The Board evaluated the management fees and other fees and expenses of the Fund. The Board reviewed, among other things, the gross and net management fees and net total expenses of the Fund (expressed as a percentage of average net assets) in absolute terms and also in comparison to the fee and expense levels of a comparable universe of funds (the “Peer Universe”) selected by an independent third-party fund data provider. The Independent Board Members also reviewed the methodology regarding the construction of the applicable Peer Universe.
In their evaluation of the management fee schedule, the Independent Board Members considered the fund-level and complex-wide breakpoint schedules, as described in further detail below. In this regard, the Board considered that management recently reviewed the breakpoint schedules for the closed-end funds which resulted in reduced breakpoints and/or new breakpoints at certain asset thresholds for numerous closed-end funds, including the Fund.
In reviewing the comparative fee and expense information, the Independent Board Members recognized that various factors such as the limited size and particular composition of the Peer Universe (including the inclusion of other Nuveen funds in the peer set); expense anomalies; changes in the funds comprising the Peer Universe from year to year; levels of reimbursement or fee waivers; the timing of information used; the differences in the type and use of leverage; and differences in services provided can impact the usefulness of the comparative data in helping to assess the appropriateness of a fund’s fees and expenses. In addition, in reviewing a fund’s fees and expenses compared to the fees and expenses of its peers (excluding leverage costs and leveraged assets), the Board generally considered a fund’s expenses and fees to be higher if they were over 10 basis points higher, slightly higher if they were 6 to 10 basis points higher, in line if they were within approximately 5 basis points higher than the peer average and below if they were below the peer average of the Peer Universe. The Board reviewed the net expense ratio in recognition that the net expense ratio generally best represented the net experience of the shareholders of a fund as it directly reflected the costs of investing in the respective fund. The Board noted that the majority of the Nuveen funds had a net expense ratio near or below the average of the respective peers. For funds with a net expense ratio of 6 basis points or higher than their respective peer average, the Independent Board Members reviewed the reasons for the outlier status and were satisfied with the explanation for the difference or with any steps taken to address the difference.
The Independent Board Members noted that the Fund had a net management fee and a net expense ratio below the peer average.
Based on their review of the fee and expense information provided, the Independent Board Members determined that the Fund’s management fees (as applicable) to a Fund Adviser were reasonable in light of the nature, extent and quality of services provided to the Fund.
2. | Comparisons with the Fees of Other Clients |
The Board also reviewed information regarding the fee rates for other types of clients advised or sub-advised by the respective Fund Adviser. For the Adviser and/or its affiliated sub-advisers, such other clients may include separately managed accounts (such as retail, institutional or wrap accounts), hedge funds, other investment companies that are not offered by Nuveen but are sub-advised by one of Nuveen’s affiliated sub-advisers, foreign investment companies offered by Nuveen, and collective investment trusts.
48 | NUVEEN |
The Board recognized that the Fund had an affiliated sub-adviser. With respect to affiliated sub-advisers, the Board reviewed, among other things, the range of advisory fee rates and average fee rate assessed for the different types of clients. The Board reviewed information regarding the different types of services provided to the Fund compared to that provided to these other clients which typically did not require the same breadth of day-to-day services required for registered funds. The Board further considered information regarding the differences in, among other things, investment policies, investor profiles, and account sizes between the Nuveen funds and the other types of clients. In addition, the Independent Board Members also recognized that the management fee rates of the foreign funds advised by the Adviser may also vary due to, among other things, differences in the client base, governing bodies, operational complexities and services covered by the management fee. The Independent Board Members recognized that the foregoing variations resulted in different economics among the product structures and culminated in varying management fees among the types of clients and funds.
The Board also was aware that, since the Fund had a sub-adviser, its management fee reflected two components, the fee retained by the Adviser for its services and the fee the Adviser paid to the Sub-Adviser. The Board noted that many of the administrative services provided to support the Fund by the Adviser may not be required to the same extent or at all for the institutional clients or other clients. In general, the Board noted that higher fee levels reflected higher levels of service provided by the Fund Adviser, increased investment management complexity, greater product management requirements and higher levels of business risk or some combination of the foregoing. Given the inherent differences in the various products, particularly the extensive services provided to the Fund, the Independent Board Members concluded such facts justify the different levels of fees.
3. | Profitability of Fund Advisers |
In conjunction with their review of fees, the Independent Board Members also considered the profitability of Nuveen for its advisory activities on an absolute basis and in comparison to other investment advisers. The Independent Board Members reviewed, among other things, Nuveen’s adjusted operating margins, the gross and net revenue margins (pre-tax and after-tax) for advisory activities for the Nuveen funds, and the revenues, expenses, and net income (pre-tax and after-tax) of Nuveen for each of the last two calendar years. The Independent Board Members reviewed an analysis of the key drivers behind the changes in revenues and expenses that impacted profitability in 2015. The Independent Board Members also noted that the sub-advisory fee for the Fund is paid by the Adviser, however, the Board recognized that the Sub-Adviser is affiliated with Nuveen. In their review, the Independent Board Members recognized that profitability data is rather subjective as various allocation methodologies may be reasonable to employ but yet yield different results. The Board also reviewed the results of certain alternative methodologies. The Board considered the allocation methodology employed to prepare the profitability data as well as a summary of the refinements to the methodology that had been adopted over the years which may limit some of the comparability of Nuveen’s revenue margins over time. Two Independent Board Members also served as point persons for the Board throughout the year to review and discuss the methodology employed to develop the profitability analysis and any proposed changes thereto and to keep the Board apprised of such changes during the year. In reviewing the profitability data, the Independent Board Members noted that Nuveen’s operating margin as well as its margins for its advisory activities to the Nuveen funds for 2015 were consistent with such margins for 2014.
The Board also considered Nuveen’s adjusted operating margins compared to that of other comparable investment advisers (based on asset size and composition) with publicly available data. The Independent Board Members recognized, however, the limitations of the comparative data as the other advisers may have a different business mix, employ different allocation methodologies, have different capital structure and costs, may not be representative of the industry or other factors that limit the comparability of the profitability information. Nevertheless, the Independent Board Members noted that Nuveen’s adjusted operating margins appeared comparable to the adjusted margins of the peers.
Further, as the Adviser is a wholly-owned subsidiary of Nuveen which in turn is an operating division of TIAA Global Asset Management, the investment management arm of Teachers Insurance and Annuity Association of America (“TIAA-CREF”), the Board reviewed a balance sheet for TIAA-CREF reflecting its assets, liabilities and capital and contingency reserves for the last two calendar years to have a better understanding of the financial stability and strength of the TIAA-CREF complex, together with Nuveen.
Based on the information provided, the Independent Board Members noted that the Adviser appeared to be sufficiently profitable to operate as a viable investment management firm and to honor its obligations as a sponsor of the Nuveen funds.
NUVEEN | 49 |
Annual Investment Management Agreement Approval Process (Unaudited) (continued)
With respect to the Sub-Adviser, the Independent Board Members also considered the profitability of the Sub-Adviser from its relationship with the Nuveen funds. The Independent Board Members reviewed the Sub-Adviser’s revenues, expenses and revenue margins (pre- and post-tax) for its advisory activities for the calendar year ended December 31, 2015. The Independent Board Members also reviewed profitability analysis reflecting the revenues, expenses and revenue margin (pre- and post-tax) by asset type for the Sub-Adviser for the calendar year ending December 31, 2015.
In evaluating the reasonableness of the compensation, the Independent Board Members also considered other amounts paid to a Fund Adviser by the Fund as well as indirect benefits (such as soft dollar arrangements), if any, the Fund Adviser and its affiliates received or were expected to receive that were directly attributable to the management of the Fund. See Section E below for additional information on indirect benefits a Fund Adviser may receive as a result of its relationship with the Fund.
Based on their review, the Independent Board Members determined that the Adviser’s and the Sub-Adviser’s levels of profitability were reasonable in light of the respective services provided.
D. | Economies of Scale and Whether Fee Levels Reflect These Economies of Scale |
The Independent Board Members recognized that as the assets of a particular fund or the Nuveen complex in the aggregate increase over time, economies of scale may be realized with respect to the management of the funds, and the Independent Board Members considered the extent to which these economies are shared with the funds and their shareholders. Although the Independent Board Members recognized that economies of scale are difficult to measure with precision, the Board noted that there were several acceptable means to share economies of scale, including through breakpoints in the management fee schedule reducing the fee rates as asset levels grow, fee waiver and expense limitation agreements and the Adviser’s investment in its business which can enhance the services provided to the funds. With respect to breakpoints, the Independent Board Members noted that subject to certain exceptions, the funds in the Nuveen complex pay a management fee to the Adviser which is generally comprised of a fund-level component and complex-level component. The fund-level fee component declines as the assets of the particular fund grow and the complex-level fee component declines when eligible assets of all the funds in the Nuveen complex combined grow. With respect to closed-end funds, the Independent Board Members noted that, although such funds may from time-to-time make additional share offerings, the growth of their assets would occur primarily through the appreciation of such funds’ investment portfolios. The complex-wide fee arrangement was designed to capture economies of scale achieved when total fund complex assets increase, even if the assets of a particular fund are unchanged or decrease. The approach reflected the notion that some of Nuveen’s costs were attributable to services provided to all its funds in the complex, and therefore all funds should benefit if these costs were spread over a larger asset base.
The Independent Board Members reviewed the breakpoint and complex-wide schedules and the material savings achieved from fund-level breakpoints and complex-wide fee reductions for the 2015 calendar year.
In addition, the Independent Board Members recognized the Adviser’s ongoing investment in its business to expand or enhance the services provided to the Nuveen funds. The Independent Board Members noted, among other things, the additions to groups who play a key role in supporting the funds including in closed-end funds/structured products, fund administration, operations, fund governance, investment services, compliance, product management, and technology. The Independent Board Members also recognized the investments in systems necessary to manage the funds including in areas of risk oversight, information technology and compliance.
Based on their review, the Independent Board Members concluded that the current fee structure was acceptable and reflected economies of scale to be shared with shareholders when assets under management increase.
E. | Indirect Benefits |
The Independent Board Members received and considered information regarding other additional benefits the respective Fund Adviser or its affiliates may receive as a result of their relationship with the Fund, including compensation paid to affiliates and research received in connection with brokerage transactions (i.e., soft dollar arrangements). In this regard, the Independent Board Members noted any revenues received by affiliates of the Adviser for serving as co-manager in initial public offerings of new closed-end funds and as underwriter on shelf offerings for certain existing funds.
50 | NUVEEN |
In addition to the above, the Independent Board Members considered that the Fund’s portfolio transactions are allocated by the Sub-Adviser and the Sub-Adviser may benefit from research received through soft-dollar arrangements. The Board noted, however, that with respect to transactions in fixed income securities, such securities generally trade on a principal basis and do not generate soft dollar credits. Although the Board recognized the Sub-Adviser may benefit from a soft dollar arrangement if it does not have to pay for this research out of its own assets, the Board also recognized that any such research may benefit the Fund to the extent it enhances the ability of the Sub-Adviser to manage the Fund.
Based on their review, the Independent Board Members concluded that any indirect benefits received by a Fund Adviser as a result of its relationship with the Fund were reasonable and within acceptable parameters.
F. | Other Considerations |
The Independent Board Members did not identify any single factor discussed previously as all-important or controlling. The Board Members, including the Independent Board Members, concluded that the terms of each Advisory Agreement were fair and reasonable, that the respective Fund Adviser’s fees were reasonable in light of the services provided to the Fund and that the Advisory Agreements be renewed.
NUVEEN | 51 |
Members & Officers (Unaudited)
The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board of Trustees of the Funds. The number of trustees of the Funds is set at twelve, effective July 1, 2016. None of the trustees who are not “interested” persons of the Funds (referred to herein as “independent trustees”) has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the trustees and officers of the Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below.
Name, Year of Birth & Address | Position(s) Held with the Funds | Year First Elected or Appointed and Term(1) | Principal Occupation(s) Including other Directorships During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Board Member | ||||
Independent Board Members: | ||||||||
n WILLIAM J. SCHNEIDER | Chairman of Miller-Valentine Partners, a real estate investment company; Board Member of Med-America Health System and WDPR Public Radio station; formerly, Senior Partner and Chief Operating Officer (retired (2004) of Miller-Valentine Group; formerly, Board member, Business Advisory Council of the Cleveland Federal Reserve Bank and University of Dayton Business School Advisory Council; past Chair and Director, Dayton Development Coalition. | |||||||
1944 333 W. Wacker Drive Chicago, IL 60606 | Chairman and Board Member | Class III | 184 | |||||
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n JACK B. EVANS | President, The Hall-Perrine Foundation, a private philanthropic corporation (since 1996); Director and Chairman, United Fire Group, a publicly held company; Director, The Gazette Company; Life Trustee of Coe College and the Iowa College Foundation; formerly, President Pro-Tem of the Board of Regents for the State of Iowa University System; formerly, Director, Alliant Energy; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. | |||||||
1948 333 W. Wacker Drive Chicago, IL 60606 | Board Member | Class III | 184 | |||||
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n WILLIAM C. HUNTER | Dean Emeritus, formerly, Dean, Tippie College of Business, University of Iowa (2006-2012); Director (since 2004) of Xerox Corporation; Director (since 2005), and past President (2010-2014) Beta Gamma Sigma, Inc., The International Business Honor Society; Director of Wellmark, Inc. (since 2009); formerly, Dean and Distinguished Professor of Finance, School of Business at the University of Connecticut (2003-2006); previously, Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago (1995-2003); formerly, Director (1997-2007), Credit Research Center at Georgetown University. | |||||||
1948 333 W. Wacker Drive Chicago, IL 60606 | Board Member | Class I | 184 | |||||
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n DAVID J. KUNDERT | Formerly, Director, Northwestern Mutual Wealth Management Company (2006-2013), retired (since 2004) as Chairman, JPMorgan Fleming Asset Management, President and CEO, Banc One Investment Advisors Corporation, and President, One Group Mutual Funds; prior thereto, Executive Vice President, Banc One Corporation and Chairman and CEO, Banc One Investment Management Group; Regent Emeritus, Member of Investment Committee, Luther College; member of the Wisconsin Bar Association; member of Board of Directors and Chair of Investment Committee, Greater Milwaukee Foundation; member of the Board of Directors (Milwaukee), College Possible; Board member of Milwaukee Repertory Theatre (since 2016). | |||||||
1942 333 W. Wacker Drive Chicago, IL 60606 | Board Member | Class II | 184 | |||||
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52 | NUVEEN |
Name, Year of Birth & Address | Position(s) Held with the Funds | Year First Elected or Appointed and Term(1) | Principal Occupation(s) Including other Directorships During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Board Member | ||||
Independent Board Members (continued): | ||||||||
n ALBIN F. MOSCHNER(2) | Founder and Chief Executive Officer, Northcroft Partners, LLC, a management consulting firm (since 2012); previously, held positions at Leap Wireless International, Inc., including Consultant (2011-2012), Chief Operating Officer (2008-2011), and Chief Marketing Officer (2004-2008); formerly, President, Verizon Card Services division of Verizon Communications, Inc. (2000-2003); formerly, President, One Point Services at One Point Communications (1999-2000); formerly, Vice Chairman of the Board, Diba, Incorporated (1996-1997); formerly, various executive positions with Zenith Electronics Corporation (1991-1996). Director, USA Technologies, Inc., a provider of solutions and services to facilitate electronic payment transactions (since 2012); formerly, Director, Wintrust Financial Corporation (1996-2016). | |||||||
1952 333 W. Wacker Drive Chicago, IL 60606 | Board Member | Class III | 184 | |||||
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n JOHN K. NELSON | Member of Board of Directors of Core12 LLC (since 2008), a private firm which develops branding, marketing and communications strategies for clients; Director of The Curran Center for Catholic American Studies (since 2009) and The President’s Council, Fordham University (since 2010); formerly, senior external advisor to the financial services practice of Deloitte Consulting LLP (2012-2014): formerly, Chairman of the Board of Trustees of Marian University (2010 as trustee, 2011-2014 as Chairman); formerly, Chief Executive Officer of ABN AMRO N.V. North America, and Global Head of its Financial Markets Division (2007-2008); prior senior positions held at ABN AMRO include Corporate Executive Vice President and Head of Global Markets-the Americas (2006- 2007), CEO of Wholesale Banking North America and Global Head of Foreign Exchange and Futures Markets (2001-2006), and Regional Commercial Treasurer and Senior Vice President Trading-North America (1996-2001); formerly, Trustee at St. Edmund Preparatory School in New York City. | |||||||
1962 333 W. Wacker Drive Chicago, IL 60606 | Board Member | Class II | 184 | |||||
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n JUDITH M. STOCKDALE | Board Member, Land Trust Alliance (since 2013) and U.S. Endowment for Forestry and Communities (since 2013); formerly, Executive Director (1994-2012), Gaylord and Dorothy Donnelley Foundation; prior thereto, Executive Director, Great Lakes Protection Fund (1990-1994). | |||||||
1947 333 W. Wacker Drive Chicago, IL 60606 | Board Member | Class I | 184 | |||||
n CAROLE E. STONE | Director, Chicago Board Options Exchange, Inc. (since 2006); Director, C2 Options Exchange, Incorporated (since 2009); Director, CBOE Holdings, Inc. (since 2010); formerly, Commissioner, New York State Commission on Public Authority Reform (2005-2010). | |||||||
1947 333 W. Wacker Drive Chicago, IL 60606 | Board Member | Class I | 184 | |||||
n TERENCE J. TOTH | Managing Partner, Promus Capital (since 2008); Director, Fulcrum IT Service LLC (since 2010) and Quality Control Corporation (since 2012); member: Chicago Fellowship Board (since 2005), Catalyst Schools of Chicago Board (since 2008) and Mather Foundation Board (since 2012), and chair of its investment committee; formerly, Director, Legal & General Investment Management America, Inc. (2008-2013); formerly, CEO and President, Northern Trust Global Investments (2004-2007): Executive Vice President, Quantitative Management & Securities Lending (2000-2004); prior thereto, various positions with Northern Trust Company (since 1994); formerly, Member, Northern Trust Mutual Funds Board (2005-2007), Northern Trust Global Investments Board (2004-2007), Northern Trust Japan Board (2004-2007), Northern Trust Securities Inc. Board (2003-2007) and Northern Trust Hong Kong Board (1997-2004). | |||||||
1959 333 W. Wacker Drive Chicago, IL 60606 | Board Member | Class II | 184 | |||||
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NUVEEN | 53 |
Board Members & Officers (Unaudited) (continued)
Name, Year of Birth & Address | Position(s) Held with the Funds | Year First Elected or Appointed and Term(1) | Principal Occupation(s) Including other Directorships During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Board Member | ||||
Independent Board Members (continued): | ||||||||
n MARGARET L. WOLFF | Member of the Board of Directors (since 2013) of Travelers Insurance Company of Canada and The Dominion of Canada General Insurance Company (each, a part of Travelers Canada, the Canadian operation of The Travelers Companies, Inc.); formerly, Of Counsel, Skadden, Arps, Slate, Meagher & Flom LLP (Mergers & Acquisitions Group) (2005-2014); Member of the Board of Trustees of New York-Presbyterian Hospital (since 2005); Member (since 2004) and Chair (since 2015) of the Board of Trustees of The John A. Hartford Foundation (a philanthropy dedicated to improving the care of older adults); formerly, Member (2005-2015) and Vice Chair (2011-2015) of the Board of Trustees of Mt. Holyoke College. | |||||||
1955 333 W. Wacker Drive Chicago, IL 60606 | Board Member | Class I | 184 | |||||
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Interested Board Members: | ||||||||
n WILLIAM ADAMS IV(3) | Co-Chief Executive Officer and Co-President (since March 2016), formerly, Senior Executive Vice President, Global Structured Products (2010-2016), prior thereto, Executive Vice President, U.S. Structured Products, (1999-2010) of Nuveen Investments, Inc.; Co-President of Nuveen Fund Advisors, LLC (since 2011); Co-Chief Executive Officer (since 2016), formerly, Senior Executive Vice President of Nuveen Securities, LLC; President (since 2011), of Nuveen Commodities Asset Management, LLC; Board Member of the Chicago Symphony Orchestra and of Gilda’s Club Chicago. | |||||||
1955 333 W. Wacker Drive Chicago, IL 60606 | Board Member | Class II | 184 | |||||
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n MARGO L. COOK(2)(3) | Co-Chief Executive Officer and Co-President (since March 2016), formerly, Senior Executive Vice President of Nuveen Investments, Inc; Co-Chief Executive Officer (since 2015), previously, Executive Vice President (2013-2015) of Nuveen Securities, LLC; Senior Executive Vice President (since 2015) of Nuveen Fund Advisors, LLC (Executive Vice President 2011-2015); formerly, Managing Director of Nuveen Commodities Asset Management, LLC (2011-2016); Chartered Financial Analyst. | |||||||
1964 333 W. Wacker Drive Chicago, IL 60606 | Board Member | Class III | 184 | |||||
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54 | NUVEEN |
Name, Year of Birth & Address | Position(s) Held with the Funds | Year First Elected or Appointed(4) | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Officer | ||||
Officers of the Funds: | ||||||||
n GIFFORD R. ZIMMERMAN | Managing Director (since 2002), and Assistant Secretary of Nuveen Securities, LLC; Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc.; Managing Director (since 2002), Assistant Secretary (since 1997) and Co-General Counsel (since 2011) of Nuveen Fund Advisors, LLC; Managing Director, Assistant Secretary and Associate General Counsel of Nuveen Asset Management, LLC (since 2011); Managing Director and Assistant Secretary of Nuveen Investments Advisers, LLC (since 2002) and Symphony Asset Management LLC (since 2003); Vice President and Assistant Secretary of NWQ Investment Management Company, LLC (since 2002), Santa Barbara Asset Management, LLC (since 2006), and of Winslow Capital Management, LLC, (since 2010); Vice President and Assistant Secretary (since 2013), formerly, Chief Administrative Officer and Chief Compliance Officer (2006-2013) of Nuveen Commodities Asset Management, LLC; Chartered Financial Analyst. | |||||||
1956 333 W. Wacker Drive Chicago, IL 60606 | Chief Administrative Officer | 1988 | 185 | |||||
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n CEDRIC H. ANTOSIEWIC | Managing Director of Nuveen Securities, LLC. (since 2004); Managing Director of Nuveen Fund Advisors, LLC (since 2014). | |||||||
1962 333 W. Wacker Drive Chicago, IL 60606 | Vice President | 2007 | 84 | |||||
n LORNA C. FERGUSON | Managing Director (since 2004) of Nuveen Investments Holdings, Inc. | |||||||
1945 333 W. Wacker Drive Chicago, IL 60606 | Vice President | 1998 | 185 | |||||
n STEPHEN D. FOY | Managing Director (since 2014), formerly, Senior Vice President (2013-2014) and Vice President (2005-2013) of Nuveen Fund Advisors, LLC; Chief Financial Officer of Nuveen Commodities Asset Management, LLC (since 2010); Managing Director (since 2016) of Nuveen Securities, LLC; Certified Public Accountant. | |||||||
1954 333 W. Wacker Drive Chicago, IL 60606 | Vice President and Controller | 1998 | 185 | |||||
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n NATHANIEL T. JONES | Senior Vice President (since 2016), formerly, Vice President (2011-2016) of Nuveen Investments Holdings, Inc.; Chartered Financial Analyst. | |||||||
1979 333 W. Wacker Drive Chicago, IL 60606 | Vice President and Treasurer | 2016 | 184 | |||||
n WALTER M. KELLY | Senior Vice President (since 2008) of Nuveen Investment Holdings, Inc. | |||||||
1970 333 W. Wacker Drive Chicago, IL 60606 | Chief Compliance Officer and Vice President | 2003 | 185 | |||||
n DAVID J. LAMB | Senior Vice President of Nuveen Investments Holdings, Inc. (since 2006), Vice President prior to 2006. | |||||||
1963 333 W. Wacker Drive Chicago, IL 60606 | Vice President | 2015 | 84 | |||||
n TINA M. LAZAR | Senior Vice President of Nuveen Investments Holdings, Inc. and Nuveen Securities, LLC. | |||||||
1961 333 W. Wacker Drive Chicago, IL 60606 | Vice President | 2002 | 185 |
NUVEEN | 55 |
Board Members & Officers (Unaudited) (continued)
Name, Year of Birth & Address | Position(s) Held with the Funds | Year First Elected or Appointed(4) | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Officer | ||||
Officers of the Funds (continued): | ||||||||
n KEVIN J. MCCARTHY | Executive Vice President, Secretary and General Counsel (since March 2016), formerly, Managing Director and Assistant Secretary of Nuveen Investments, Inc.; Executive Vice President (since March 2016), formerly, Managing Director, and Assistant Secretary (since 2008) of Nuveen Securities, LLC; Executive Vice President and Secretary (since March 2016), formerly, Managing Director (2008-2016) and Assistant Secretary (2007-2016), and Co-General Counsel (since 2011) of Nuveen Fund Advisors, LLC; Executive Vice President and Secretary (since March 2016), formerly, Managing Director, Assistant Secretary (2011-2016), and Associate General Counsel (since 2011) of Nuveen Asset Management, LLC; Executive Vice President and Secretary of Nuveen Investments Advisers, LLC; Vice President (since 2007) and Secretary (since March 2016) of NWQ Investment Management Company, LLC, Symphony Asset Management LLC, Santa Barbara Asset Management, LLC, Winslow Capital Management, LLC (since 2010) and Tradewinds Global Investors, LLC (since 2016); Vice President (since 2010) and Secretary (since 2016), formerly, Assistant Secretary of Nuveen Commodities Asset Management, LLC. | |||||||
1966 333 W. Wacker Drive Chicago, IL 60606 | Vice President and Secretary | 2007 | 185 | |||||
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n KATHLEEN L. PRUDHOMME | Managing Director, Assistant Secretary and Co-General Counsel (since 2011) of Nuveen Fund Advisors, LLC; Managing Director, Assistant Secretary and Associate General Counsel (since 2011) of Nuveen Asset Management, LLC; Managing Director and Assistant Secretary (since 2011) of Nuveen Securities, LLC; formerly, Deputy General Counsel, FAF Advisors, Inc. (2004-2010). | |||||||
1953 901 Marquette Avenue Minneapolis, MN 55402 | Vice President and Assistant Secretary | 2011 | 185 | |||||
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n JOEL T. SLAGER | Fund Tax Director for Nuveen Funds (since 2013); previously, Vice President of Morgan Stanley Investment Management, Inc., Assistant Treasurer of the Morgan Stanley Funds (from 2010 to 2013). | |||||||
1978 333 W. Wacker Drive Chicago, IL 60606 | Vice President and Assistant Secretary | 2013 | 185 |
(1) | The Board of Trustees is divided into three classes, Class I, Class II, and Class III, with each being elected to serve until the third succeeding annual shareholders’ meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed, except two board members are elected by the holders of Preferred Shares, when applicable, to serve until the next annual shareholders’ meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed. The year first elected or appointed represents the year in which the board member was first elected or appointed to any fund in the Nuveen Complex. |
(2) | On June 22, 2016, Ms. Cook and Mr. Moschner were appointed as Board members, effective July 1, 2016. |
(3) | “Interested person” as defined in the 1940 Act, by reason of his position with Nuveen Investments, Inc. and certain of its subsidiaries, which are affiliates of the Nuveen funds. |
(4) | Officers serve one year terms through August of each year. The year first elected or appointed represents the year in which the Officer was first elected or appointed to any fund in the Nuveen Complex. |
56 | NUVEEN |
Notes
NUVEEN | 57 |
Notes
58 | NUVEEN |
Notes
NUVEEN | 59 |
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Nuveen: | ||||||||||||||
Serving Investors for Generations | ||||||||||||||
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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 equity and fixed-income solutions designed to be integral components of a well-diversified core portfolio. | ||||||||||||||
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Focused on meeting investor needs.
Nuveen helps secure the long-term goals of individual investors and the advisors who serve them. As an operating division of TIAA Global Asset Management, Nuveen provides access to investment expertise from leading asset managers and solutions across traditional and alternative asset classes. Built on more than a century of industry leadership, Nuveen’s teams of experts align with clients’ specific financial needs and goals, demonstrating commitment to advisors and investors through market perspectives and wealth management and portfolio advisory services. Nuveen manages more than $239 billion in assets as of June 30, 2016. | ||||||||||||||
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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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Distributed by Nuveen Securities, LLC | 333 West Wacker Drive | Chicago, IL 60606 | www.nuveen.com/cef
EAN-A-0616D 18667-INV-B-08/17
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There were no amendments to or waivers from the Code during the period covered by this report. The registrant has posted the code of ethics on its website at www.nuveen.com/CEF/Shareholder/FundGovernance.aspx. (To view the code, click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant’s Board of Directors or Trustees (“Board”) determined that the registrant has at least one “audit committee financial expert” (as defined in Item 3 of Form N-CSR) serving on its Audit Committee. The registrant’s audit committee financial experts are Carole E. Stone and Jack B. Evans, who are “independent” for purposes of Item 3 of Form N-CSR.
Ms. Stone served for five years as Director of the New York State Division of the Budget. As part of her role as Director, Ms. Stone was actively involved in overseeing the development of the State’s operating, local assistance and capital budgets, its financial plan and related documents; overseeing the development of the State’s bond-related disclosure documents and certifying that they fairly presented the State’s financial position; reviewing audits of various State and local agencies and programs; and coordinating the State’s system of internal audit and control. Prior to serving as Director, Ms. Stone worked as a budget analyst/examiner with increasing levels of responsibility over a 30 year period, including approximately five years as Deputy Budget Director. Ms. Stone has also served as Chair of the New York State Racing Association Oversight Board, as Chair of the Public Authorities Control Board, as a Commissioner on the New York State Commission on Public Authority Reform and as a member of the Boards of Directors of several New York State public authorities. These positions have involved overseeing operations and finances of certain entities and assessing the adequacy of project/entity financing and financial reporting. Currently, Ms. Stone is on the Board of Directors of CBOE Holdings, Inc., of the Chicago Board Options Exchange, and of C2 Options Exchange. Ms. Stone’s position on the boards of these entities and as a member of both CBOE Holdings’ Audit Committee and its Finance Committee has involved, among other things, the oversight of audits, audit plans and preparation of financial statements.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial Group, Inc., a full service registered broker-dealer and registered investment adviser (“SCI”). As part of his role as President and Chief Operating Officer, Mr. Evans actively supervised the Chief Financial Officer (the “CFO”) and actively supervised the CFO’s preparation of financial statements and other filings with various regulatory authorities. In such capacity, Mr. Evans was actively involved in the preparation of SCI’s financial statements and the resolution of issues raised in connection therewith. Mr. Evans has also served on the audit committee of various reporting companies. At such companies, Mr. Evans was involved in the oversight of audits, audit plans, and the preparation of financial statements. Mr. Evans also formerly chaired the audit committee of the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Multi-Market Income Fund
The following tables show the amount of fees that KPMG LLP, the Fund’s auditor, billed to the Fund during the Fund’s last two full fiscal years. For engagements with KPMG LLP the Audit Committee approved in advance all audit services and non-audit services that KPMG LLP provided to the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the “pre-approval exception”). The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee’s attention, and the Committee (or its delegate) approves the services before the audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND’S AUDITOR BILLED TO THE FUND
Fiscal Year Ended | Audit Fees Billed to Fund 1 | Audit-Related Fees Billed to Fund 2 | Tax Fees Billed to Fund 3 | All Other Fees Billed to Fund 4 | ||||||||||||
June 30, 2016 | $ | 33,620 | $ | 0 | $ | 0 | $ | 0 | ||||||||
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Percentage approved pursuant to pre-approval exception | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||
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June 30, 2015 | $ | 32,500 | $ | 0 | $ | 0 | $ | 0 | ||||||||
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Percentage approved pursuant to pre-approval exception | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||
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1 “Audit Fees” are the aggregate fees billed for professional services for the audit of the Fund’s annual financial statements and services provided in connection with statutory and regulatory filings or engagements.
2 “Audit Related Fees” are the aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of financial statements that are not reported under “Audit Fees”. These fees include offerings related to the Fund’s common shares and leverage.
3 “Tax Fees” are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning. These fees include: all global withholding tax services; excise and state tax reviews; capital gain, tax equalization and taxable basis calculation performed by the principal accountant.
4 “All Other Fees” are the aggregate fees billed for products and services other than “Audit Fees”, “Audit-Related Fees” and “Tax Fees”. These fees represent all engagements pertaining to the Fund’s use of leverage.
SERVICES THAT THE FUND’S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by KPMG LLP to Nuveen Fund Advisors, LLC (formerly Nuveen Fund Advisors, Inc.) (the “Adviser”), and any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund (“Affiliated Fund Service Provider”), for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval exception. The pre-approval exception for services provided to the Adviser and any Affiliated Fund Service Provider (other than audit, review or attest services) waives the pre-approval requirement if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to KPMG LLP by the Fund, the Adviser and Affiliated Fund Service Providers during the fiscal year in which the services are provided that would have to be pre-approved by the Audit Committee; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee’s attention, and the Committee (or its delegate) approves the services before the Fund’s audit is completed.
Fiscal Year Ended | Audit-Related Fees Billed to Adviser and Affiliated Fund Service Providers | Tax Fees Billed to Adviser and Affiliated Fund Service Providers | All Other Fees Billed to Adviser and Affiliated Fund Service Providers | |||||||||
June 30, 2016 | $ | 0 | $ | 0 | $ | 0 | ||||||
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Percentage approved pursuant to pre-approval exception | 0 | % | 0 | % | 0 | % | ||||||
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June 30, 2015 | $ | 0 | $ | 0 | $ | 0 | ||||||
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Percentage approved pursuant to pre-approval exception | 0 | % | 0 | % | 0 | % | ||||||
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NON-AUDIT SERVICES
The following table shows the amount of fees that KPMG LLP billed during the Fund’s last two full fiscal years for non-audit services. The Audit Committee is required to pre-approve non-audit services that KPMG LLP provides to the Adviser and any Affiliated Fund Services Provider, if the engagement related directly to the Fund’s operations and financial reporting (except for those subject to the pre-approval exception described above). The Audit Committee requested and received information from KPMG LLP about any non-audit services that KPMG LLP rendered during the Fund’s last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating KPMG LLP ’s independence.
Fiscal Year Ended | Total Non-Audit Fees Billed to Fund | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) | Total | ||||||||||||
June 30, 2016 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
June 30, 2015 | $ | 0 | $ | 0 | $ | 0 | $ | 0 |
“Non-Audit Fees billed to Fund” for both fiscal year ends represent “Tax Fees” and “All Other Fees” billed to Fund in their respective amounts from the previous table.
Less than 50 percent of the hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit Committee must approve (i) all non-audit services to be performed for the Fund by the Fund’s independent accountants and (ii) all audit and non-audit services to be performed by the Fund’s independent accountants for the Affiliated Fund Service Providers with respect to operations and financial reporting of the Fund. Regarding tax and research projects conducted by the independent accountants for the Fund and Affiliated Fund Service Providers (with respect to operations and financial reports of the Fund) such engagements will be (i) pre-approved by the Audit Committee if they are expected to be for amounts greater than $10,000; (ii) reported to the Audit Committee chairman for his verbal approval prior to engagement if they are expected to be for amounts under $10,000 but greater than $5,000; and (iii) reported to the Audit Committee at the next Audit Committee meeting if they are expected to be for an amount under $5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant’s Board has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Jack B. Evans, David J. Kundert, John K. Nelson, Carole E. Stone and Terence J. Toth.
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.
Nuveen Fund Advisors, LLC, formerly known as Nuveen Fund Advisors, Inc., is the registrant’s investment adviser (also referred to as the “Adviser”). The Adviser is responsible for the on-going monitoring of the Fund’s investment portfolio, managing the Fund’s business affairs and providing certain clerical, bookkeeping and administrative services. The Adviser has engaged Nuveen Asset Management, LLC (“Sub-Adviser”) as Sub-Adviser to provide discretionary investment advisory services. As part of these services, the Adviser has delegated to the Sub-Adviser the full responsibility for proxy voting on securities held in the registrant’s portfolio and related duties in accordance with the Sub-Adviser’s policies and procedures. The Adviser periodically monitors the Sub-Adviser’s voting to ensure that it is carrying out its duties. The Sub-Adviser’s proxy voting policies and procedures are attached to this filing as an exhibit and incorporated herein by reference.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Nuveen Fund Advisors, LLC (“NFALLC”) is the registrant’s investment adviser (NFALLC is also referred to as the “Adviser”.) NFALLC is responsible for the selection and on-going monitoring of the Fund’s investment portfolio, managing the Fund’s business affairs and providing certain clerical, bookkeeping and administrative services. The Adviser has engaged Nuveen Asset Management, LLC (“Nuveen Asset Management” or “Sub-Adviser”), as Sub-Adviser to provide discretionary investment advisory services. The following section provides information on the portfolio managers at the Sub-Adviser:
Item 8(a)(1). PORTFOLIO MANAGER BIOGRAPHIES
John T. Fruit, CFA, entered the financial services industry in 1988 and joined FAF Advisors in 2001 as a senior fixed-income research analyst. He became a portfolio manager in 2005 and most recently served as Senior Fixed-Income Portfolio Manager at FAF Advisors until joining Nuveen Asset Management. He joined Nuveen Asset Management as Senior Vice President, Portfolio Manager and Head of High-Yield Credit Sector Team on January 1, 2011 in connection with its acquisition of a portion of FAF’s asset management business.
Chris J. Neuharth, CFA, entered the financial services industry in 1981 and became a portfolio manager in 1985. He rejoined FAF Advisors (“FAF”) in 2000 and most recently served as Senior Fixed-Income Portfolio Manager at FAF until joining Nuveen Asset Management. He joined Nuveen Asset Management as Managing Director, Portfolio Manager and Head of Securitized Debt Sector Team on January 1, 2011 in connection with its acquisition of a portion of FAF’s asset management business.
Jason J. O’Brien, CFA, entered the financial services industry in 1993 when he joined FAF. He became a portfolio manager in 2001 and most recently served as Fixed-Income Portfolio Manager at FAF until joining Nuveen Asset Management. He joined Nuveen Asset Management as Vice President and Portfolio Manager on January 1, 2011 in connection with its acquisition of a portion of FAF’s asset management business.
Peter L. Agrimson, CFA, is a co-manager on the Short Duration Multi Sector strategy and related institutional portfolios. He is also a member of the Securitized Debt Sector Team, responsible for trading mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities. He performs credit analysis and surveillance for the firm’s mortgage-backed securities and asset-backed securities portfolios. He began working in the financial services industry in 2005.
Item 8(a)(2). OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGERS
In addition to the Fund, as of June 30, 2016, the portfolio managers are also primarily responsible for the day-to-day portfolio management of the following accounts:
(ii) Number of Other Accounts Managed and Assets by Account Type* | (iii) Number of Other Accounts and Assets for Which Advisory Fee is Performance-Based | |||||||||||||||||||||||||||||||||||||
(i) Name of Portfolio Manager | Other Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | Other Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | ||||||||||||||||||||||||||||||||
John Fruit | 5 | $1.85 billion | 1 | $6.79 million | 4 | $1.4 million | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Chris Neuharth | 9 | $3.15 billion | 2 | $371.7 million | 1 | $590 million | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Jason O’Brien | 3 | $882 million | 0 | $0 | 18 | $645 million | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Peter Agrimson | 1 | $615 million | 6 | $2.1 billion |
* | Assets are as of June 30, 2016. |
POTENTIAL MATERIAL CONFLICTS OF INTEREST
Actual or apparent conflicts of interest may arise when a portfolio manager has day-to-day management responsibilities with respect to more than one account. More specifically, portfolio managers who manage multiple accounts are presented a number of potential conflicts, including, among others, those discussed below.
The management of multiple accounts may result in a portfolio manager devoting unequal time and attention to the management of each account. Nuveen Asset Management seeks to manage such competing interests for the time and attention of portfolio managers by having portfolio managers focus on a particular investment discipline. Most accounts managed by a portfolio manager in a particular investment strategy are managed using the same investment models.
If a portfolio manager identifies a limited investment opportunity which may be suitable for more than one account, an account may not be able to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible accounts. To deal with these situations, Nuveen Asset Management has adopted procedures for allocating limited opportunities across multiple accounts.
With respect to many of its clients’ accounts, Nuveen Asset Management determines which broker to use to execute transaction orders, consistent with its duty to seek best execution of the transaction. However, with respect to certain other accounts, Nuveen Asset Management may be limited by the client with respect to the selection of brokers or may be instructed to direct trades through a particular broker. In these cases, Nuveen Asset Management may place separate, non-simultaneous, transactions for a Fund and other accounts which may temporarily affect the market price of the security or the execution of the transaction, or both, to the detriment of the Fund or the other accounts.
Some clients are subject to different regulations. As a consequence of this difference in regulatory requirements, some clients may not be permitted to engage in all the investment techniques or transactions or to engage in these transactions to the same extent as the other accounts managed by the portfolio manager. Finally, the appearance of a conflict of interest may arise where Nuveen Asset Management has an incentive, such as a performance-based management fee, which relates to the management of some accounts, with respect to which a portfolio manager has day-to-day management responsibilities.
Nuveen Asset Management has adopted certain compliance procedures which are designed to address these types of conflicts common among investment managers. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises.
Item 8(a)(3). FUND MANAGER COMPENSATION
Portfolio manager compensation consists primarily of base pay, an annual cash bonus and long term incentive payments.
Base pay. Base pay is determined based upon an analysis of the portfolio manager’s general performance, experience, and market levels of base pay for such position.
Annual cash bonus. The Fund’s portfolio managers are eligible for an annual cash bonus based on investment performance, qualitative evaluation and financial performance of Nuveen Asset Management.
A portion of each portfolio manager’s annual cash bonus is based on the Fund’s pre-tax investment performance, generally measured over the past one- and three or five-year periods unless the portfolio manager’s tenure is shorter. Investment performance for the Fund generally is determined by evaluating the Fund’s performance relative to its benchmark(s) and/or Lipper industry peer group.
A portion of the cash bonus is based on a qualitative evaluation made by each portfolio manager’s supervisor taking into consideration a number of factors, including the portfolio manager’s team collaboration, expense management, support of personnel responsible for asset growth, and his or her compliance with Nuveen Asset Management‘s policies and procedures.
The final factor influencing a portfolio manager’s cash bonus is the financial performance of Nuveen Asset Management based on its operating earnings.
Long-term incentive compensation. Certain key employees of Nuveen Investments and its affiliates, including certain portfolio managers, participate in a Long-Term Performance Plan designed to provide compensation opportunities that links a portion of each participant’s compensation to Nuveen Investments’ financial and operational performance. In addition, certain key employees of Nuveen Asset Management, including certain portfolio managers, have received profits interests in Nuveen Asset Management which entitle their holders to participate in the firm’s growth over time.
There are generally no differences between the methods used to determine compensation with respect to the Fund and the Other Accounts shown in the table above.
Item 8(a)(4). OWNERSHIP OF JMM SECURITIES AS OF JUNE 30, 2016
Name of Portfolio Manager | None | $1-$10,000 | $10,001- $50,000 | $50,001- $100,000 | $100,001- $500,000 | $500,001- $1,000,000 | Over $1,000,000 | |||||||||||||||
Peter Agrimson | X | |||||||||||||||||||||
John Fruit | X | |||||||||||||||||||||
Chris Neuharth | X | |||||||||||||||||||||
Jason O’Brien | X |
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
(a) | (b) | (c) | (d)* | |||||||||||||
Period* | Total Number of Shares (or Units) Purchased | Average Price Paid Per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs | ||||||||||||
July 1-31, 2015 | 1,500 | $ | 7.17 | 1,500 | 943,500 | |||||||||||
August 1-31, 2015 | 0 | 0 | 945,000 | |||||||||||||
September 1-30, 2015 | 0 | 0 | 945,000 | |||||||||||||
October 1-31, 2015 | 0 | 0 | 945,000 | |||||||||||||
November 1-30, 2015 | 300 | $ | 6.92 | 300 | 944,700 | |||||||||||
December 1-31, 2015 | 0 | 0 | 944,700 | |||||||||||||
January 1-31, 2016 | 0 | 0 | 944,700 | |||||||||||||
February 1-29, 2016 | 0 | 0 | 944,700 | |||||||||||||
March 1-31, 2016 | 0 | 0 | 944,700 | |||||||||||||
April 1-30, 2016 | 0 | 0 | 944,700 | |||||||||||||
May 1-31, 2016 | 0 | 0 | 944,700 | |||||||||||||
June 1-30, 2016 | 0 | 0 | 944,700 | |||||||||||||
Total | 1,800 |
* | The registrant’s repurchase program, for the repurchase of 945,000 shares, was authorized September 28, 2014. The program was reauthorized for a maximum repurchase amount of 945,000 shares on August 4, 2015. Any repurchases made by the registrant pursuant to the program were made through open-market transactions. |
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 because the code is posted on registrant’s website at www.nuveen.com/CEF/Shareholder/FundGovernance.aspx and there were no amendments during the period covered by this report. (To view the code, click on Code of Conduct.)
(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: 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 registrant specifically incorporates it by reference. 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 Multi-Market Income Fund
By (Signature and Title) | /s/ Kevin J. McCarthy | |||
Kevin J. McCarthy | ||||
Vice President and Secretary | ||||
Date: September 7, 2016 |
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/ Gifford R. Zimmerman | |||
Gifford R. Zimmerman | ||||
Chief Administrative Officer | ||||
(principal executive officer) | ||||
Date: September 7, 2016 | ||||
By (Signature and Title) | /s/ Stephen D. Foy | |||
Stephen D. Foy | ||||
Vice President and Controller | ||||
(principal financial officer) | ||||
Date: September 7, 2016 |