Nuveen Preferred & Income Term Fund successfully completed a tender offer, transitioning to a perpetual structure with only 37% of shareholders tendering their shares. Shareholders who tendered their shares will receive NAV for their holdings, while those who did not will continue to hold JPI and face risks associated with bank preferred equity. The corporate action led to an 8% gain for all shareholders in 2024 due to the discount to NAV moving to flat, with the CEF expected to start trading at a discount again post-transition.
Nuveen Preferred & Income Term Fund primarily invests in fixed-income securities, limiting its ability to protect against inflation. The JPI closed-end fund has a lower yield than many of its peers, making it less appealing for income-focused investors. Despite the lower yield, the fund has delivered strong performance, outperforming major fixed-income indices and appreciating by 16.53% since October 2023.
We review CEF market valuation and performance through the third week of February and highlight recent market action. CEF performance was mixed, with MLPs and EM Equity funds outperforming. It's safe to ignore the word arbitrage when used in the CEF context.
We review CEF market valuation and performance through the first week of February and highlight recent market action. All but one sector rallied this week despite Powell taking away the March cut punchbowl. Invesco hiked the dividends of its Muni CEFs by 10-23%, following the lead of Nuveen and BlackRock.
The preferred CEF JPI has delivered on its term structure by offering investors and exist at the NAV. While there are always risks in the termination process, these are mitigated by a number of factors. The fund offers a strong near-term tactical opportunity.
Nuveen Preferred & Income Term Fund is a term CEF that is set to liquidate in August 2024. The fund manager and its Board of Trustees have proposed to make JPI a perpetual CEF, eliminating the term structure. Existing shareholders are advised to vote in favor of the conversion to mitigate market risk associated with the liquidation.
The Nuveen Preferred and Income Term Fund is a term closed-end fund that primarily invests in preferred securities. Investors are concerned about the fund's performance as it approaches its termination date next year, following the recent struggles of IHIT - another term fund. JPI has a relatively typical preferred CEF portfolio, with a focus on financials and a significant allocation to floating-rate securities and contingent capital bonds.
Nuveen Preferred & Income Term Fund offers a 7.07% yield, which compares respectably to most alternatives today. The JPI closed-end fund is set to expire next year and its shares are currently trading at a discount, providing potential for capital gains. The fund primarily invests in preferred stock and other income-producing securities, but its exposure to interest rate fluctuations poses risks.
We review CEF market valuation and performance through the third week of April and highlight recent market action. The CEF market was mostly down as interest rates and credit spreads rose over the week.
Bank failures in the U.S. and elsewhere have caused air pockets in parts of the preferreds market. We take a look at the impact of recent developments on the sector, including the price action in AT1s.