Nuveen Preferred and Income Securities Fund

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number  

811-21137

Nuveen Preferred and Income Securities Fund

 

(Exact name of registrant as specified in charter)

Nuveen Investments

333 West Wacker Drive, Chicago, IL 60606

 

(Address of principal executive offices)  (Zip code)

Gifford R. Zimmerman

Nuveen Investments

333 West Wacker Drive, Chicago, IL 60606

 

(Name and address of agent for service)

Registrant’s telephone number, including area code:   (312) 917-7700                    

Date of fiscal year end:   July 31                       

Date of reporting period:   January 31, 2018                    

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policy making roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss.3507.


ITEM 1. REPORTS TO STOCKHOLDERS.


     LOGO
Closed-End Funds   

 

     Nuveen
     Closed-End Funds

 

 

 

 

       

 

 

Semi-Annual Report  January 31, 2018

 

     
           
JPC            

Nuveen Preferred and Income Opportunities Fund

 
           
JPI            
Nuveen Preferred and Income Term Fund  
           
JPS            

Nuveen Preferred and Income Securities Fund

 
           
JPT            
Nuveen Preferred and Income 2022 Term Fund  
           

 


 

 

     

 

           
 

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LOGO


Table

of Contents

 

Chairman’s Letter to Shareholders

     4  

Portfolio Managers’ Comments

     5  

Fund Leverage

     14  

Common Share Information

     15  

Risk Considerations

     17  

Performance Overview and Holding Summaries

     20  

Portfolios of Investments

     28  

Statement of Assets and Liabilities

     52  

Statement of Operations

     53  

Statement of Changes in Net Assets

     54  

Statement of Cash Flows

     56  

Financial Highlights

     58  

Notes to Financial Statements

     62  

Additional Fund Information

     77  

Glossary of Terms Used in this Report

     78  

Reinvest Automatically, Easily and Conveniently

     81  

 

NUVEEN     3  


Chairman’s Letter

to Shareholders

 

LOGO

Dear Shareholders,

Financial markets ended 2017 on a high note. Concurrent growth across the world’s major economies, strong corporate profits, low inflation and accommodative central banks provided an optimal environment for rising asset prices with remarkably low volatility. Political risks, which were expected to be a wildcard in 2017, did not materialize. The Trump administration achieved one of its major policy goals with the passage of the Tax Cuts and Jobs Act, the European Union (EU) member governments elected EU-friendly leadership, Brexit negotiations moved forward and China’s 19th Party Congress concluded with no major surprises in its economic policy objectives.

Conditions have turned more volatile in 2018, but the positive fundamentals underpinning the markets’ rise over the past year remain intact. In early February, fears of rising inflation, which could prompt more aggressive action by the Federal Reserve (Fed), trigged a widespread sell-off across U.S. and global equity markets. Yet, global economies are still expanding and corporate earnings look healthy, which helped markets stabilize and partially recover the losses.

We do believe volatility will continue to feature more prominently in 2018. Interest rates have been rising and inflation pressures are mounting. Jerome Powell’s first testimony as Fed Chairman increased the likelihood of four rate hikes in 2018, up from three projected at the end of 2017, while also emphasizing the gradual pace of rate hikes established by his predecessor will continue. Investors are uncertain about how markets will react amid tighter financial conditions. After the relative calm of the past few years, it’s anticipated that price fluctuations will begin trending toward a more historically normal range. But we also note that signs foreshadowing recession are lacking at this point.

Maintaining perspective can be difficult with daily headlines focused predominantly on short-term news. Nuveen believes this can be an opportune time to check in with your financial advisor. Strong market appreciation such as that in 2017 may create an imbalance in a diversified portfolio. Your advisor can help you reexamine your investment goals and risk tolerance, and realign your portfolio’s investment mix, if appropriate. 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,

 

LOGO

William J. Schneider

Chairman of the Board

March 22, 2018

 

 

  4     NUVEEN


Portfolio Managers’

Comments

 

Nuveen Preferred and Income Opportunities Fund (JPC)

Nuveen Preferred and Income Term Fund (JPI)

Nuveen Preferred and Income Securities Fund (JPS)

Nuveen Preferred and Income 2022 Term Fund (JPT)

Nuveen Asset Management, LLC (NAM) and NWQ Investment Management Company, LLC (NWQ), both affiliates of Nuveen LLC, are sub-advisers for the Nuveen Preferred and Income Opportunities Fund (JPC). NAM and NWQ each manage approximately half of the Fund’s investment portfolio. Douglas Baker, CFA and Brenda Langenfeld, CFA, are the portfolio managers for the NAM team. The NWQ income-oriented investment team is led by Thomas J. Ray, CFA and Susi Budiman, CFA. The Nuveen Preferred and Income Term Fund (JPI) features management by NAM, an affiliate of Nuveen LLC. Douglas Baker, CFA, and Brenda Langenfeld, CFA, have served as the Fund’s portfolio managers since its inception. The Nuveen Preferred and Income Securities Fund (JPS) is sub-advised by a team of specialists at Spectrum Asset Management, a wholly owned subsidiary of Principal Global Investors, LLC. Mark Lieb and Phil Jacoby lead the team. The Nuveen Preferred and Income 2022 Term Fund (JPT) features management by NAM. Douglas Baker, CFA, and Brenda Langenfeld, CFA, have served as the Fund’s portfolio managers since its inception.

Effective September 29, 2017 as approved by the Fund’s Board of Trustees, the Nuveen Preferred Income Opportunities Fund’s name was changed to the Nuveen Preferred and Income Opportunities Fund. Also effective September 29, 2017, the Fund will invest at least 80% of the sum of its net assets and the amount of any borrowings for investment purposes in preferred and other income producing securities, including hybrid securities such as contingent capital securities and up to 20% opportunistically in other income-oriented securities such as corporate and taxable municipal debt and dividend paying common equity.

Effective September 29, 2017 as approved by the Fund’s Board of Trustees, the Nuveen Preferred Securities Income Fund’s name was changed to the Nuveen Preferred and Income Securities Fund.

 

 

This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her advisors.

Certain statements in this report are forward-looking statements. Discussions of specific investments are for illustration only and are not intended as recommendations of individual investments. The forward-looking statements and other views expressed herein are those of the portfolio managers as of the date of this report. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements and the views expressed herein are subject to change at any time, due to numerous market and other factors. The Funds disclaim any obligation to update publicly or revise any forward-looking statements or views expressed herein.

For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s (S&P), Moody’s Investors Service, Inc. (Moody’s) or Fitch, Inc. (Fitch). This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings, while BB, B, CCC, CC, C and D are below investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.

 

NUVEEN     5  


Portfolio Managers’ Comments (continued)

 

Also effective September 29, 2017, the Fund will invest at least 80% of the sum of its net assets and the amount of any borrowings for investment purposes in preferred and other income producing securities, including hybrid securities such as contingent capital securities.

What key strategies were used to manage the Funds during this six-month reporting period ended January 31, 2018 and how did these strategies influence performance?

Nuveen Preferred and Income Opportunities Fund (JPC)

The table in the Performance Overview and Holding Summaries section of this report provides total return performance for the Fund for the six-month, one-year, five-year and ten-year periods ended January 31, 2018. For the six-month reporting period ended January 31, 2018, the Fund’s common shares at net asset value (NAV) outperformed the ICE BofAML U.S. All Capital Securities Index and the JPC Blended Benchmark.

JPC had a policy requiring it to invest at least 80% of its managed assets in preferred securities and contingent capital securities (sometimes referred to as “CoCos”), and permitting it to invest up to 20% opportunistically over the market cycle in other types of securities, primarily income oriented securities such as corporate and taxable municipal debt and common equity. JPC is managed by two experienced portfolio teams with distinctive, complementary approaches to the preferred market, each managing its own “sleeve” of the portfolio. NAM employs a debt-oriented approach that combines top down relative value analysis of industry sectors with fundamental credit analysis. NWQ’s investment process identifies undervalued securities within a company’s capital structure that offer the most attractive risk/reward potential. This multi-team approach gives investors access to a broader investment universe with greater diversification potential.

NAM

For the portion of the Fund managed by NAM, the Fund seeks to achieve its investment objective of providing a high level of current income and total return by investing in preferred securities and other income producing securities, including but not limited to contingent capital securities (CoCos). The Fund’s portfolio is actively managed, seeking to capitalize on strong and continuously improving credit fundamentals across the issuer base, the category’s healthy yield level and inefficiencies that often evolve between the $25 par retail and the $1,000 par institutional sides of the market. The Fund’s strategy has a bias toward the highly regulated industries, like utilities, banks and insurance companies, in hopes of benefitting from the added scrutiny of regulatory oversight.

NAM employs a credit-based investment approach, using a top-down process to position the portfolio in a manner that reflects the investment team’s overall macro-economic outlook, while also incorporating a bottom-up approach that includes fundamental credit research, security structure selection, and option adjusted spread (OAS) analysis. The process begins with identifying the investable universe of $1,000 par and $25 par securities. In an effort to capitalize on the inefficiencies between different investor bases within this universe, NAM tactically and strategically shifts capital between the $25 par exchange listed market and the $1,000 par over-the-counter market. Periods of volatility may drive notably different valuations between these two markets, as will periods where valuations trend in one direction for an extended period of time. This dynamic is often related to differences in how retail and institutional markets perceive and price risk, as well as differences in retail and institutional investors’ ability to source substitute investments. Technical factors such as new issue supply may also influence the relative valuations between $25 par exchange listed structures and $1,000 par over-the-counter structures.

For the six-month reporting period, the Fund’s Blended Benchmark Index, which represents the combined preferred securities and CoCos markets, returned 2.02% which fell between both comparable financial senior debt and financial equities. NAM typically expects the Blended Benchmark Index to perform between these two categories given the hybrid nature of its constituent securities. Investment performance was not dispersed evenly across the various

 

  6     NUVEEN


 

sub-categories within the Blended Benchmark Index. For example, during the reporting period, both $25 par securities and securities with fixed rate coupons posted negative returns, while securities with coupons that have reset features, $1,000 par securities, and CoCos all posted positive returns over the same timeframe. Option adjusted spreads (OAS) for the Blended Benchmark Index tightened materially during the measurement period. The move in OAS was due primarily to relatively light new issue supply, historically strong bank balance sheets and continued profitability, a positive trend in global macro-economic data, the resolution by the European Central Bank (ECB) of several nagging headlines within the European bank sector and generally speaking, higher government benchmark bond yields both in the U.S and abroad.

NAM incorporated several active themes within the Fund relative to its benchmark during the reporting period, including an overweight to U.S.-domiciled issuers, an underweight to CoCos, an overweight to the $1,000 par side of the market and an overweight to securities that have coupons with reset features (floating rate, fixed-to-floating rate, fixed-to-fixed rate).

During the reporting period, the overweight to U.S.-domiciled issuers detracted modestly from performance relative to the Blended Benchmark Index, as non-U.S.-domiciled issuers outperformed over the last six months. Taking a closer look at the U.S. versus non-U.S. allocation, the underweight to non-U.S. issuers again was almost entirely due to an underweight to CoCos. As of January 31, 2018, the Fund had an allocation of around 29% to contingent capital securities, still well below the 40% allocation within the Blended Benchmark Index. Admittedly, while still a meaningful underweight versus the index, NAM increased the Fund’s allocation to these securities by approximately 8% during the reporting period. Positive developments within the European bank sector disproportionately benefited European banks and non-U.S. domiciled issuers, and as a result, the CoCos market.

While the non-U.S. segment of the market posted a positive total return during the reporting period, the U.S. segment of the market fared worse, posting a negative total return. Most of the negative return for the U.S. segment was realized during January 2018, when domestic interest rates pushed meaningfully higher. Up until that point, the return for the U.S. segment had been trending in positive territory. Supply out of U.S. banks continued to be very light, supporting valuations in the secondary market, as most U.S. banks already have met their regulatory Additional Tier-1 Capital requirements. From a fundamental standpoint, U.S. banks continued to be incredibly profitable, while maintaining capital levels still well above regulatory requirements. Despite supportive technical and strong fundamentals, the push higher in U.S. rates during January 2018 was more than enough to overwhelm the cumulative returns of the preceding five months combined.

Given the outperformance in the $1,000 par institutional side of the market during the reporting period, our overweight to $1,000 par structures contributed to the Fund’s relative performance. As has been the case for several quarters, NAM maintained an overweight to $1,000 par securities for two primary reasons, relative value and interest rate risk management. First, the $1,000 par side of the market continues to be significantly cheaper than the $25 par side of the market on an option adjusted spread (OAS) basis. Retail investors historically have demonstrated a strong bias for income-generating investment solutions. Couple this natural bias with a prolonged period of low interest rates and retail demand for income has only grown increasingly intense. Within the preferred securities universe, the $25 par side of the market is arguably best positioned to benefit from retail demand. The small size is more manageable for retail investors versus $1,000 par structures and securities that trade on an exchange are easier for retail to source than those traded over-the-counter. Unfortunately, many retail investors lack the wherewithal to calculate relative value metrics such as yield-to-worst and OAS, and instead often focus only on the size of a particular security’s coupon. Therefore, it is no surprise that in this environment, the retail investor has driven $25 par security valuations to such very rich levels versus $1,000 par valuations.

Second, NAM’s overweight to $1,000 par securities allows NAM to gain greater exposure to securities that have coupons with reset features, like floating rate coupons, fixed-to-floating rate coupons and fixed-to-fixed rate coupons.

 

NUVEEN     7  


Portfolio Managers’ Comments (continued)

 

These structures are more common on the institutional $1,000 par side of the market and help to mitigate duration and duration extension risk during a rising interest rate environment. Duration extension is a significant risk for callable securities with fixed-rate coupons. As of January 31, 2018, the Fund had about 87% of its assets invested in securities that have coupons with reset features, compared to approximately 70% within the Blended Benchmark Index.

As an aside, NAM believes we may be witnessing the sprouts of a new technical relationship developing between the $25 par and $1,000 par markets. Over the past few months, NAM has witnessed a trend in the preferred exchange-traded fund (ETF) market where $1,000 par strategies have been driving positive net investor flows, while $25 par strategies generally have experienced net outflows. NAM will keep a close eye on this dynamic as ETF flows have played a meaningful role in relative valuations between the $25 and $1,000 par markets. As existing $1,000 par ETFs attract more investor assets, and as more $1,000 par strategies come on-line, this dynamic could be a catalyst for shrinking the gap in valuations between $25 par and $1,000 par securities.

NWQ

For the portion of the Fund managed by NWQ, NWQ seeks to achieve high income and a measure of capital appreciation. While the Fund’s investments are primarily preferred securities, a portion of the Fund allows the flexibility to invest across the capital structure in any type of debt, preferred or equity securities offered by a particular company. The portfolio management team then evaluates all available investment choices within a selected company’s capital structure to determine the portfolio investment that may offer the most favorable risk-adjusted return potential. The Fund’s portfolio is constructed with an emphasis on seeking a sustainable level of income and an overall analysis for downside risk management.

During the reporting period, NWQ’s preferred, equity, investment grade corporate bonds holdings contributed to performance, while high yield holdings slightly detracted from performance. Several sectors contributed to the Fund’s performance, in particular NWQ’s holdings in the financials and utilities sectors, while the insurance sector was the largest detractor.

Several of NWQ’s holdings performed well during the reporting period. A top contributor to performance for the reporting period was a Viacom Inc. corporate bond. In November 2017, Viacom worked on its debt reduction efforts by announcing a $1 billion tender offer. Credit spreads tightened upon this announcement as gross leverage declined to under 3.5x after the tender offer. The long duration of the bond also contributed to performance as long term interest rates declined during the reporting period. Another top contributor to performance was a Kindred Healthcare Inc. high yield bond. The company provides a range of health care services that includes operating hospitals, nursing centers, institutional pharmacies and contract rehabilitation services throughout the United States. The price of the bond jumped after the company announced in mid-December 2017 that it has entered into a definitive agreement to be acquired by a consortium of three companies (TPG, Welsh Carson and Humana). Given that this senior note is not callable nor does it carry a change of control covenant, it is expected that the make whole call provision, a provision that allows the issuer to pay off remaining debt early, will be exercised after the deal closes (expect summer of 2018, subject to shareholder and regulatory approvals). Lastly, a CVR Partners, LP high yield bond contributed to performance. CVR is a Master Limited Partnership (MLP) that formed to own, operate and grow its nitrogen fertilizer business. NWQ expects ammonia, a material used to make nitrogen, pricing to remain near trough levels for the remainder of the year before rebounding in 2018 and beyond.

Individual positions that detracted from performance during the reporting period included Dish DBS Corporation senior notes. The drivers of the underperformance were continued concerns about a pending buildout of a wireless network. These concerns were augmented with potentially fewer buyers of spectrum as merger discussions took place between Sprint and T-Mobile. Additionally, the company’s satellite TV business had results that were worse than expected. While NWQ shares some of these concerns, NWQ believes the bonds offer a very attractive risk/reward particularly since the

 

  8     NUVEEN


 

wireless spectrum has a value of up to two times the company’s debt outstanding. The investment in the preferred stock of telecommunication services holding, Frontier Communications Corporation, also detracted from performance. The company acquired assets from Verizon in California, Texas and Florida two years ago and the integration has gone worse than expected. Furthermore, weak earnings at Frontier and Windstream has already dampened the sentiment in the wireline telecom sector.

Nuveen Preferred and Income Term Fund (JPI)

The table in the Performance Overview and Holding Summaries section of this report provides total return performance for the Fund for the six-month, one-year, five-year and since inception periods ended January 31, 2018. For the six-month reporting period ended January 31, 2018, the Fund’s common shares at net asset value (NAV) outperformed the ICE BofAML U.S. All Capital Securities Index and the JPI Blended Benchmark Index.

The Fund seeks to achieve its investment objective of providing a high level of current income and total return by investing in preferred securities and other income producing securities, including but not limited to contingent capital securities (CoCos). The Fund’s portfolio is actively managed, seeking to capitalize on strong and continuously improving credit fundamentals across the issuer base, the category’s healthy yield level and inefficiencies that often evolve between the $25 par retail and the $1,000 par institutional sides of the market. The Fund’s strategy focuses opportunistically on highly regulated industries, like utilities, banks and insurance companies, with a current emphasis broadly on financial services companies.

NAM employs a credit-based investment approach, using a top-down process to position the portfolio in a manner that reflects the investment team’s overall macro-economic outlook, while also incorporating a bottom-up approach that includes fundamental credit research, security structure selection, and option adjusted spread (OAS) analysis. The process begins with identifying the investable universe of $1,000 par and $25 par securities. In an effort to capitalize on the inefficiencies between different investor bases within this universe, NAM tactically and strategically shifts capital between the $25 par exchange listed market and the $1,000 par over-the-counter market. Periods of volatility may drive notably different valuations between these two markets, as will periods where valuations trend in one direction for an extended period of time. This dynamic is often related to differences in how retail and institutional markets perceive and price risk, as well as differences in retail and institutional investors’ ability to source substitute investments. Technical factors such as new issue supply may also influence the relative valuations between $25 par exchange listed structures and $1,000 par over-the-counter structures.

For the six-month reporting period, the Fund’s Blended Benchmark Index, which represents the combined preferred securities and contingent capital securities markets, returned 2.02% which fell between both comparable financial senior debt and financial equities. NAM typically expects the Blended Benchmark Index to perform between these two categories given the hybrid nature of its constituent securities. Investment performance was not dispersed evenly across the various sub-categories within the Blended Benchmark Index. For example, during the reporting period, both $25 par securities and securities with fixed rate coupons posted negative returns, while securities with coupons that have reset features, $1,000 par securities, and contingent capital securities all posted positive returns over the same timeframe. Option adjusted spreads (OAS) for the Blended Benchmark Index tightened materially during the measurement period. The move in OAS was due primarily to relatively light new issue supply, historically strong bank balance sheets and continued profitability, a positive trend in global macro-economic data, the resolution by the European Central Bank (ECB) of several nagging headlines within the European bank sector, and generally speaking, higher government benchmark bond yields both here in the U.S. and abroad.

NAM incorporated several active themes within the Fund relative to its benchmark during the reporting period, including an overweight to U.S.-domiciled issuers, an underweight to CoCos, an overweight to the $1,000 par side of the

 

NUVEEN     9  


Portfolio Managers’ Comments (continued)

 

market and an overweight to securities that have coupons with reset features (floating rate, fixed-to-floating rate, fixed-to-fixed rate).

During the reporting period, the overweight to U.S.-domiciled issuers detracted modestly from performance relative to the Blended Benchmark Index, as non-U.S.-domiciled issuers outperformed during the reporting period. Taking a closer look at the U.S. versus non-U.S. allocation, the underweight to non-U.S. issuers again was almost entirely due to an underweight to CoCos. As of January 31, 2018, the Fund had an allocation of around 29% to CoCos, still well below the 40% allocation within the Blended Benchmark Index. Admittedly, while still a meaningful underweight versus the index, NAM increased the Fund’s allocation to these securities by approximately 8% during the reporting period. Positive developments within the European bank sector disproportionately benefited European banks and non-U.S. domiciled issuers, and as a result, the CoCos market.

While the non-U.S. segment of the market posted a positive total return during the reporting period, the U.S. segment of the market fared worse, posting a negative total return over the same period. Most of the negative return for the U.S. segment was realized during January 2018, when domestic interest rates pushed meaningfully higher. Up until that point, the return for the U.S. segment had been trending in positive territory. Supply out of U.S. banks continued to be very light, supporting valuations in the secondary market, as most U.S. banks already have met their regulatory Additional Tier-1 Capital requirements. From a fundamental standpoint, U.S. banks continued to be incredibly profitable, while maintaining capital levels still well above regulatory requirements. Despite supportive technical and strong fundamentals, the push higher in U.S. rates during January 2018 was more than enough to overwhelm the cumulative returns of the preceding five months combined.

Given the outperformance in the $1,000 par institutional side of the market during the reporting period, our overweight to $1,000 par structures contributed to the Fund’s relative performance. As has been the case for several quarters, NAM maintained an overweight to $1,000 par securities for two primary reasons, relative value and interest rate risk management. First, the $1,000 par side of the market continues to be significantly cheaper than the $25 par side of the market on an OAS basis. Retail investors historically have demonstrated a strong bias for income-generating investment solutions. Couple this natural bias with a prolonged period of low interest rates, and retail demand for income has only grown increasingly intense. Within the preferred securities universe, the $25 par side of the market is arguably best positioned to benefit from retail demand. The small size is more manageable for retail investors versus $1,000 par structures, and securities that trade on an exchange are easier for retail to source than those traded over-the-counter. Unfortunately, many retail investors lack the wherewithal to calculate relative value metrics such as yield-to-worst and OAS, and instead often focus only on the size of a particular security’s coupon. Therefore, it is no surprise that in this environment, the retail investor has driven $25 par security valuations to such very rich levels versus $1,000 par valuations.

Second, NAM’s overweight to $1,000 par securities allows NAM to gain greater exposure to securities that have coupons with reset features, like floating rate coupons, fixed-to-floating rate coupons and fixed-to-fixed rate coupons. These structures are more common on the institutional $1,000 par side of the market, and help to mitigate duration and duration extension risk during a rising interest rate environment. Duration extension is a significant risk for callable securities with fixed-rate coupons. As of January 31, 2018, the Fund had about 87% of its assets invested in securities that have coupons with reset features, compared to approximately 70% within the Blended Benchmark Index.

NAM believes we may be witnessing the sprouts of a new technical relationship developing between the $25 par and $1,000 par markets. Over the past few months, NAM has witnessed a trend in the preferred exchange traded fund (ETF) market where $1,000 par strategies have been driving positive net investor flows, while $25 par strategies generally have experienced net outflows. NAM will keep a close eye on this dynamic as ETF flows have played a meaningful role in relative valuations between the $25 and $1,000 par markets. As existing $1,000 par ETFs attract more investor assets, and as more $1,000 par strategies come on-line, this dynamic could be a catalyst for shrinking the gap in valuations between $25 par and $1,000 par securities.

 

  10     NUVEEN


 

Nuveen Preferred and Income Securities Fund (JPS)

The table in the Performance Overview and Holding Summaries section of this report provide total return performance for the Fund for the six-month, one-year, five-year and ten-year periods ended January 31, 2018. For the six-month reporting period ended January 31, 2018, the Fund’s common shares at net asset value (NAV) outperformed the ICE BofAML U.S. All Capital Securities Index and the JPS Blended Benchmark.

The investment objective of the Fund is to seek high current income consistent with capital preservation with a secondary objective to enhance portfolio value relative to the broad market for preferred securities. Under normal market conditions, the Fund seeks to invest at least 80% of its net assets in preferred securities and up to 20% of its net assets in debt securities, including convertible debt and convertible preferred securities.

The equity markets provided a supportive backdrop to the junior subordinated capital securities markets, which include preferred securities and contingent capital securities (CoCos) issued mostly by financials. The interest rate environment was also supportive being little changed until January 2018. Both bonds and equities benefited from very little concern that inflation would rise and upset either economic growth or the Federal Reserve Bank’s slow pace of rate increases. It was the combination of the 25 basis points increase in the federal funds rate together with stellar equity performance that began to convince more individual investors to take some profits after the New Year January 2018. Underlying asset performance in the Fund outpaced the common share price performance of the Fund as investors took profits come January after a very good overall calendar year in 2017.

Spectrum’s tactical overweight exposure to both institutional sectors of the junior subordinated capital securities, which includes both preferred and CoCos, benefited performance. A preferred security represents a capital security issued either through charter amendment (as a stock) or through indenture (as a bond). For preferred securities, any reorganization would be processed through a bankruptcy court. Preferred security payments are in priority to common stock dividends, yet can be deferred, which means payments are cumulative or they can be eliminated which means payments are non-cumulative without causing an immediate event of default. Any principal loss absorption on a preferred security would be forced through a statutory resolution in a bankruptcy proceeding. A CoCo represents a capital security issued through indenture. For CoCos, a reorganization would be processed through the contracts of its capital before falling into an actual bankruptcy. CoCo payments are non-cumulative and equal to common stock dividends and can be reduced or eliminated without causing an event of default. Principal loss absorption on a CoCo could be forced through a regulatory action in advance of any bankruptcy proceeding.

The Fund owns a blend of junior subordinated capital securities in the two segments, the preferred securities segment, represented by the ICE BofAML All Capital Securities Index, comprises approximately 62% of the Fund (including some cash) and the CoCo segment, represented by the ICE BofAML Contingent Capital Index comprises 38% of the Fund.

During the reporting period, the top three performing sub-sectors of the Fund were corporate hybrids, CoCos and insurance hybrids. The bottom three performing sub-sectors were $25 par baby bonds, $25 par preferred stock and $25 par hybrids.

Top performing holdings for the Fund during the reporting period included Lloyds Banking Group PLC 7.50%, SocGen 8% and Royal Bank of Scotland Group PLC 7.50%, which are all CoCos. Being overweight CoCos and underweight the $25 par sector benefited performance.

During the reporting period several individual securities detracted from performance. Most of the underperforming securities such as Qwest 7%, PNC Financial Services 6.12% and Allstate Corporation 5.12% were primarily concentrated in the retail sector, which detracted from total return during the reporting period.

 

NUVEEN     11  


Portfolio Managers’ Comments (continued)

 

Nuveen Preferred and Income 2022 Term Fund (JPT)

The table in the Performance Overview and Holding Summaries section of this report provides total return performance for the Fund for the six-month, one-year and since inception periods ended January 31, 2018. For the six-month reporting period ended January 31, 2018, the Fund’s common shares at net asset value (NAV) underperformed the ICE BofAML U.S. All Capital Securities Index.

The Fund seeks to achieve its investment objective of providing a high level of current income and total return by investing in preferred securities and other income producing securities. The Fund’s portfolio is actively managed, seeking to capitalize on strong and continuously improving credit fundamentals across the issuer base, the category’s healthy yield level, and inefficiencies that often evolve between the $25 par retail and the $1,000 par institutional sides of the market. The Fund’s strategy has a bias toward the highly regulated industries, like utilities, banks and insurance companies, with a current emphasis broadly on financial services companies. The Fund does not invest in contingent capital securities (otherwise known as CoCos).

NAM employs a credit-based investment approach, using a top-down process to position the portfolio in a manner that reflects the investment team’s overall macro-economic outlook, while also incorporating a bottom-up approach that includes fundamental credit research, security structure selection, and option adjusted spread (OAS) analysis. The process begins with identifying the investable universe of $1,000 par and $25 par securities. In an effort to capitalize on the inefficiencies between different investor bases within this universe, NAM tactically and strategically shifts capital between the $25 par exchange listed market and the $1,000 par over-the-counter market. Periods of volatility may drive notably different valuations between these two markets, as will periods where valuations trend in one direction for an extended period of time. This dynamic is often related to differences in how retail and institutional markets perceive and price risk, as well as differences in retail and institutional investors’ ability to source substitute investments. Technical factors such as new issue supply may also influence the relative valuations between $25 par exchange listed structures and $1,000 par over-the-counter structures.

Within JPT, NAM incorporated a couple prominent active themes within the Fund relative to its benchmark during the reporting period, of particular note an overweight to the $1,000 par side of the market, and an overweight to securities that have coupons with reset features (floating rate, fixed-to-floating rate, fixed-to-fixed rate).

Given the outperformance in the $1,000 par institutional side of the market during the reporting period, our overweight to $1,000 par structures contributed to the Fund’s relative results. As has been the case for several quarters, NAM maintained an overweight to $1,000 par securities for two primary reasons, relative value and interest rate risk management. First, the $1,000 par side of the market continues to be significantly cheaper than the $25 par side of the market on an OAS basis. Retail investors historically have demonstrated a strong bias for income-generating investments. Couple this natural bias with a prolonged period of low interest rates, and retail demand for income solutions has only grown more intense. Within the preferred securities and contingent capital securities markets, the $25 par side of the market is arguably best positioned to benefit from retail demand. Unfortunately, many retail investors lack the wherewithal to calculate relative value metrics such as yield-to-worst and OAS, and instead often focus only on the size of a particular security’s coupon. Therefore, it is no surprise that this investor base has driven $25 par security valuations to such very rich levels versus $1,000 par valuations.

Second, our overweight to $1,000 par securities allows us to gain greater exposure to securities that have coupons with reset features, like floating rate coupons, fixed-to-floating rate coupons and fixed-to-fixed rate coupons. These structures are more common on the institutional $1,000 par side of the market, and help to mitigate duration and duration extension risk during a rising interest rate environment. Duration extension is a significant risk for callable securities with fixed-rate coupons. As of January 31, 2018, the Fund had about 83% of its assets invested in securities that have coupons with reset features.

 

 

  12     NUVEEN


 

NAM believes we may be witnessing the sprouts of a new technical relationship developing between the $25 par and $1,000 par markets. During the reporting period, NAM has witnessed a trend in the preferred exchange traded fund (ETF) market where $1,000 par strategies have been driving positive net investor flows, while $25 par strategies generally have experienced net outflows. NAM will keep a close eye on this dynamic as ETF flows have played a meaningful role in relative valuations between the $25 and $1,000 par markets. As existing $1,000 par ETFs attract more investor assets, and as more $1,000 par strategies come on-line, this dynamic could be a catalyst for shrinking the gap in valuations between $25 par and $1,000 par securities.

Slightly detracting from JPT’s relative performance was an overweight to issuers in the industrial sector during the reporting period. JPT was overweight both GE and Viacom for most of the six-month reporting period. Idiosyncratic headlines for both companies weighed on valuations. NAM decided to exit their Viacom position before the end of the reporting period, but NAM maintains conviction that the headlines around GE are temporary in nature. NAM has conviction in GE as a credit and NAM finds the structural features of the specific GE security JPT owns to be compelling. That being said, NAM will remain vigilant with respect to monitoring the credit and NAM stands ready to reduce exposure should our fundamental opinion deteriorate from our current view.

JPT added short interest rate futures during the period to manage the Fund’s exposure to various points along the yield curve, with a net effect of decreasing the Fund’s overall interest rate sensitivity. These interest rate futures had a positive effect to overall Fund performance during the reporting period.

 

NUVEEN     13  


Fund

Leverage

 

IMPACT OF THE FUNDS’ LEVERAGE STRATEGIES ON PERFORMANCE

One important factor impacting the returns of the Funds relative to their comparative benchmarks was the Funds’ use of leverage through the use of bank borrowings as well as the use of reverse repurchase agreements for JPC and JPS. The Funds use leverage because our research has shown that, over time, leveraging provides opportunities for additional income and total return for common shareholders. However, the use of leverage also can expose common shareholders to additional volatility. For example, as the prices of securities held by a Fund decline, the negative impact of these valuation changes on common share NAV and common shareholder total return is magnified by the use of leverage. Conversely, leverage may enhance common share returns during periods when the prices of securities held by a Fund generally are rising. The Funds’ use of leverage had a positive impact on performance during this reporting period.

JPC, JPI and JPS continued to utilize forward starting interest rate swap contracts to partially hedge the interest cost of leverage, which as mentioned previously, is through the use of bank borrowings. During this reporting period, these swap contracts contributed to overall Fund performance.

As of January 31, 2018, the Funds’ percentages of leverage are shown in the accompanying table.

 

     JPC        JPI        JPS        JPT  

Effective Leverage*

    33.79        27.72        33.21        20.00

Regulatory Leverage*

    28.41        27.72        28.68        20.00
* Effective leverage is a Fund’s effective economic leverage, and includes both regulatory leverage and the leverage effects of certain derivative and other investments in a Fund’s portfolio that increase the Fund’s investment exposure. Regulatory leverage consists of preferred shares issued or borrowings of a Fund. Both of these are part of the Fund’s capital structure. A Fund, however, may from time to time borrow on a typically transient basis in connection with its day-to-day operations, primarily in connection with the need to settle portfolio trades. Such incidental borrowings are excluded from the calculation of a Fund’s effective leverage ratio. Regulatory leverage is subject to asset coverage limits set forth in the Investment Company Act of 1940.

THE FUNDS’ LEVERAGE

Bank Borrowings

As noted above, the Funds employ regulatory leverage through the use of bank borrowings. The Funds’ bank borrowing activities are as shown in the accompanying table.

 

    Current Reporting Period           Subsequent to the Close of
the Reporting Period
 
Fund   August 1, 2017     Draws     Paydowns     January 31, 2018     Average Balance
Outstanding
           Draws     Paydowns     March 26, 2018  

JPC

  $ 540,000,000     $     —     $ (103,000,000   $ 437,000,000   $ 441,478,261             $     —     $     —     $ 437,000,000  

JPI

  $ 225,000,000     $     $     $ 225,000,000   $ 225,000,000             $     $     $ 225,000,000  

JPS

  $ 845,300,000     $     $     $ 845,300,000     $ 845,300,000             $     $     $ 845,300,000  

JPT

  $ 42,500,000     $     $     $ 42,500,000     $ 42,500,000             $     $     $ 42,500,000  

Refer to Notes to Financial Statements, Note 8 – Fund Leverage for further details.

Reverse Repurchase Agreements

As noted above, JPC and JPS utilized reverse repurchase agreements. The Fund’s transactions in reverse repurchase agreements are as shown in the accompanying table.

 

 

  Current Reporting Period           Subsequent to the Close of
the Reporting Period
 
Fund   August 1, 2017     Purchases     Sales     January 31, 2018     Average Balance
Outstanding
           Purchases     Sales     March 26, 2018  
JPC   $     —     $ 125,000,000     $     —     $ 125,000,000     $ 125,000,000               $    —     $     —     $ 125,000,000  
JPS   $ 200,000,000     $     —     $     —     $ 200,000,000     $ 200,000,000               $    —     $     —     $ 200,000,000  

 

  14     NUVEEN


Common Share

Information

 

COMMON SHARE DISTRIBUTION INFORMATION

The following information regarding the Funds’ distributions is current as of January 31, 2018. Each Fund’s distribution levels may vary over time based on each Fund’s investment activity and portfolio investment value changes.

During the current reporting period, each Fund’s distributions to common shareholders were as shown in the accompanying table.

 

    Per Common Share Amounts  
Monthly Distributions (Ex-Dividend Date)   JPC        JPI        JPS        JPT  

August 2017

  $ 0.0650        $ 0.1415        $ 0.0620        $ 0.1275  

September

    0.0650          0.1415          0.0620          0.1275  

October

    0.0650          0.1415          0.0620          0.1275  

November

    0.0650          0.1415          0.0620          0.1275  

December

    0.0650          0.1415          0.0620          0.1275  

January 2018

    0.0650          0.1415          0.0620          0.1275  

Total Distributions

  $ 0.3900        $ 0.8490        $ 0.3720        $ 0.7650  
                                          

Current Distribution Rate*

    7.95        7.11        7.88        6.49
* Current distribution rate is based on the Fund’s current annualized monthly distribution divided by the Fund’s current market price. The Fund’s monthly distributions to its shareholders may be comprised of ordinary income, net realized capital gains and, if at the end of the fiscal year the Fund’s cumulative net ordinary income and net realized gains are less than the amount of the Fund’s distributions, a return of capital for tax purposes.

Each Fund in this report seeks to pay regular monthly dividends out of their net investment income at a rate that reflects its past and projected net income performance. To permit each Fund to maintain a more stable monthly dividend, the Fund may pay dividends at a rate that may be more or less than the amount of net income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it will hold the excess in reserve as undistributed net investment income (UNII) as part of the Fund’s net asset value. Conversely, if a Fund has cumulatively paid in dividends more than it has earned, the excess will constitute a negative UNII that will likewise be reflected in the Fund’s net asset value. Each Fund will, over time, pay all its net investment income as dividends to shareholders.

As of January 31, 2018, JPS and JPT had positive UNII balances while JPC and JPI had zero UNII balances, based upon our best estimate, for tax purposes. JPC, JPI and JPS had negative UNII balances while JPT had a positive UNII balance for financial reporting purposes.

All monthly dividends paid by the Funds during the current reporting period, were paid from net investment income. If a portion of the Funds’ monthly distributions were sourced from or comprised of elements other than net investment income, including capital gains and/or a return of capital, shareholders would have received a notice to that effect. For financial reporting purposes, the composition and per share amounts of each Fund’s dividends for the reporting period are presented in this report’s Statement of Changes in Net Assets and Financial Highlights, respectively. For income tax purposes, distribution information for each Fund as of its most recent tax year end is presented in Note 6 – Income Tax Information within the Notes to Financial Statements of this report.

COMMON SHARE REPURCHASES

During August 2017, the Funds’ Board of Trustees reauthorized for JPC, JPI and JPS and authorized for JPT an open-market share repurchase program, allowing each Fund to repurchase an aggregate of up to approximately 10% of its outstanding shares.

 

NUVEEN     15  


Common Share Information (continued)

 

As of January 31, 2018, and since the inception of the Funds’ repurchase programs, the Funds have cumulatively repurchased and retired their outstanding common shares as shown in the accompanying table.

 

     JPC        JPI        JPS        JPT  

Common shares cumulatively repurchased and retired

    2,826,100          0          0          0  

Common shares authorized for repurchase

    10,335,000          2,275,000          20,380,000          680,000  

During the current reporting period, the Funds did not repurchase any of their outstanding common shares.

OTHER COMMON SHARE INFORMATION

As of January 31, 2018, and during the current reporting period, the Funds’ common share prices were trading at a premium/(discount) to their common share NAVs as shown in the accompanying table.

 

     JPC        JPI        JPS        JPT  

Common share NAV

  $ 10.66        $ 25.78        $ 10.32        $ 24.89  

Common share price

  $ 9.81        $ 23.88        $ 9.44        $ 23.58  

Premium/(Discount) to NAV

    (7.97 )%         (7.37 )%         (8.53 )%         (5.26 )% 

6-month average premium/(discount) to NAV

    (3.28 )%         (3.57 )%         (1.36 )%         (0.51 )% 

 

  16     NUVEEN


Risk

Considerations

 

Fund shares are not guaranteed or endorsed by any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation.

Nuveen Preferred and Income Opportunities Fund (JPC)

Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Lower credit debt securities may be more likely to fail to make timely interest or principal payments. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. Certain types of preferred or debt securities with special loss absorption provisions, such as contingent capital securities (CoCos), may be or become so subordinated that they present risks equivalent to, or in some cases even greater than, the same company’s common stock. These loss absorption features work to the benefit of the security issuer, not the investor. These and other risk considerations such as concentration and foreign securities risk are described in more detail on the Fund’s web page at www.nuveen.com/JPC.

Nuveen Preferred and Income Term Fund (JPI)

Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Lower credit debt securities may be more likely to fail to make timely interest or principal payments. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. Certain types of preferred or debt securities with special loss absorption provisions, such as contingent capital securities (CoCos), may be or become so subordinated that they present risks equivalent to, or in some cases even greater than, the same company’s common stock. These loss absorption features work to the benefit of the security issuer, not the investor. For these and other risks, including the Fund’s limited term and concentration risk, see the Fund’s web page at www.nuveen.com/JPI.

Nuveen Preferred and Income Securities Fund (JPS)

Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. Certain types of preferred or debt securities with special loss absorption provisions, such as contingent capital securities (CoCos), may be or become so subordinated that they present risks equivalent to, or in some cases even greater than, the same company’s common stock. These loss absorption features work to the benefit of the security issuer, not the investor. These and other risks such as concentration and foreign securities risk are described in more detail on the Fund’s web page at www.nuveen.com/JPS.

 

NUVEEN     17  


Risk Considerations (continued)

 

Nuveen Preferred and Income 2022 Term Fund (JPT)

Investing in closed-end funds involves risk; principal loss is possible. There is no guarantee the Fund’s investment objectives will be achieved. Closed-end fund shares may frequently trade at a discount or premium to their net asset value. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure, and therefore are subject to greater credit risk. Debt or fixed income securities such as those held by the Fund, are subject to market risk, credit risk, interest rate risk, derivatives risk, liquidity risk, and income risk. As interest rates rise, bond prices fall. Lower credit debt securities may be more likely to fail to make timely interest or principal payments. Leverage increases return volatility and magnifies the Fund’s potential return and its risks; there is no guarantee a fund’s leverage strategy will be successful. For these and other risks, including the Fund’s limited term and concentration risk, see the Fund’s web page at www.nuveen.com/JPT.

 

  18     NUVEEN


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NUVEEN     19  


JPC

 

Nuveen Preferred and Income Opportunities Fund

Performance Overview and Holding Summaries as of January 31, 2018

 

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.

Average Annual Total Returns as of January 31, 2018

 

       Cumulative        Average Annual  
        6-Month        1-Year        5-Year        10-Year  
JPC at Common Share NAV        1.68%          10.80%          8.09%          6.63%  
JPC at Common Share Price        (3.82)%          6.61%          8.09%          7.77%  
ICE BofAML U.S. All Capital Securities Index        0.26%          7.07%          6.32%          4.42%  
JPC Blended Benchmark        0.62%          7.87%          5.83%          4.58%  

Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment. Performance for indexes that were created after the Fund’s inception are linked to the Fund’s previous benchmark.

Common Share Price Performance — Weekly Closing Price

 

LOGO

 

  20     NUVEEN


 

This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.

For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.

 

Fund Allocation

(% of net assets)

 

$1,000 Par (or similar) Institutional Preferred     68.6%  
$25 Par (or similar) Retail Preferred     43.5%  
Contingent Capital Securities     24.2%  
Corporate Bonds     10.0%  
Convertible Preferred Securities     1.1%  
Common Stocks     0.3%  
Repurchase Agreements     2.0%  
Other Assets Less Liabilities     1.4%  

Net Assets Plus Borrowings and Reverse Repurchase Agreements

    151.1%  
Borrowings     (39.7)%  
Reverse Repurchase Agreements     (11.4)%  

Net Assets

    100%  

Portfolio Composition

(% of total investments)

 

Banks     42.9%  
Insurance     13.0%  
Capital Markets     9.6%  
Food Products     5.7%  
Consumer Finance     4.3%  
Diversified Financial Services     3.0%  
Electric Utilities     2.7%  
Other     17.5%  
Repurchase Agreements     1.3%  

Total

    100%  

Country Allocation1

(% of total investments)

 

United States     72.1%  
United Kingdom     9.3%  
France     4.3%  
Italy     3.0%  
Canada     2.6%  
Switzerland     2.0%  
Other     6.7%  

Total

    100%  
 

 

Top Five Issuers

(% of total long-term
investments)

 

Citigroup Inc.     4.0%  
JPMorgan Chase & Company     3.6%  
Lloyds Banking Group PLC     3.6%  
Bank of America Corporation     3.5%  
Wells Fargo & Company     3.4%  

Portfolio Credit Quality

(% of total long-term fixed-income investments)

 

A

    3.9%  

BBB

    49.0%  

BB or Lower

    40.2%  

N/R (not rated)

    6.9%  

Total

    100%  
 

 

1 Includes 0.8% (as a percentage of total investments) in emerging market countries.

 

NUVEEN     21  


JPI

 

Nuveen Preferred and Income Term Fund

Performance Overview and Holding Summaries as of January 31, 2018

 

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.

Average Annual Total Returns as of January 31, 2018

 

       Cumulative        Average Annual  
        6-Month        1-Year        5-Year        Since
Inception
 
JPI at Common Share NAV        2.56%          13.02%          8.80%          9.95%  
JPI at Common Share Price        (1.75)%          7.74%          7.99%          8.01%  
ICE BofAML U.S. All Capital Securities Index        0.26%          7.07%          6.32%          7.44%  
JPI Blended Benchmark        2.02%          10.08%          6.05%          6.41%  

Since inception returns are from 7/26/12. Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.

Common Share Price Performance — Weekly Closing Price

 

LOGO

 

  22     NUVEEN


 

This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.

For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.

 

Fund Allocation

(% of net assets)

 

$1,000 Par (or similar) Institutional Preferred

    63.8%  

Contingent Capital Securities

    40.4%  

$25 Par (or similar) Retail Preferred

    32.1%  
Corporate Bonds     0.4%  

Repurchase Agreements

    0.4%  

Other Assets Less Liabilities

    1.3%  

Net Assets Plus Borrowings

    138.4%  

Borrowings

    (38.4)%  

Net Assets

    100%  

 

Portfolio Composition

(% of total investments)

 

Banks

    48.9%  

Insurance

    13.2%  

Capital Markets

    9.8%  

Diversified Financial Services

    5.7%  

Food Products

    4.7%  

Other

    17.4%  
Repurchase Agreements     0.3%  

Total

    100%  

Country Allocation1

(% of total investments)

 

United States     56.8%  
United Kingdom     12.8%  
France     7.6%  
Italy     5.5%  
Switzerland     3.7%  
Australia     3.4%  
Other     10.2%  

Total

    100%  
 

 

Top Five Issuers

(% of total long-term
investments)

 

Citigroup Inc.     3.7%  
Lloyds Banking Group PLC     3.7%  
JPMorgan Chase & Company     3.5%  
Assured Guaranty Limited     3.3%  
Wells Fargo & Company     3.1%  

Portfolio Credit Quality

(% of total long-term fixed-income
investments)

 

A     4.0%  
BBB     49.5%  
BB or Lower     43.5%  
N/R (not rated)     3.0%  

Total

    100%  
 

 

1 Includes 1.4% (as a percentage of total investments) in emerging market countries.

 

NUVEEN     23  


JPS

 

Nuveen Preferred and Income Securities Fund

Performance Overview and Holding Summaries as of January 31, 2018

 

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.

Average Annual Total Returns as of January 31, 2018

 

    Cumulative        Average Annual  
     6-Month        1-Year        5-Year        10-Year  
JPS at Common Share NAV     2.94%          14.50%          8.88%          6.44%  
JPS at Common Share Price     (4.93)%          5.65%          8.04%          5.99%  
ICE BofAML U.S. All Capital Securities Index     0.26%          7.07%          6.32%          6.72%  
JPS Blended Benchmark     2.02%          10.08%          6.05%          5.34%  

Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment. Performance for indexes that were created after the Fund’s inception are linked to the Fund’s previous benchmark.

Common Share Price Performance — Weekly Closing Price

 

LOGO

 

  24     NUVEEN


 

This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.

For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.

 

Fund Allocation

(% of net assets)

 

$1,000 Par (or similar) Institutional Preferred     69.9%  
Contingent Capital Securities     55.8%  
$25 Par (or similar) Retail Preferred     15.6%  
Investment Companies     1.1%  
Corporate Bonds     0.8%  
Convertible Preferred Securities     0.8%  
Repurchase Agreements     3.3%  
Other Assets Less Liabilities     2.4%  

Net Assets Plus Borrowings and Reverse Repurchase Agreements

    149.7%  
Borrowings     (40.2)%  
Reverse Repurchase Agreements     (9.5)%  

Net Assets

    100%  

Portfolio Composition

(% of total investments)

 

Banks     52.0%  
Insurance     17.9%  
Capital Markets     9.3%  
Other     17.7%  
Investment Companies     0.8%  
Repurchase Agreements     2.3%  

Total

    100%  

Country Allocation1

(% of total investments)

 

United States     47.9%  
United Kingdom     18.3%  
France     10.9%  
Switzerland     6.9%  
Sweden     3.4%  
Other     12.6%  

Total

    100%  
 

 

Top Five Issuers

(% of total long-term
investments)

 

Lloyds Banking Group PLC     4.7%  
HSBC Holdings PLC     4.1%  
JPMorgan Chase & Company     4.1%  
Barclays PLC     3.9%  
UBS Group AG     3.7%  

Portfolio Credit Quality

(% of total long-term fixed-income investments)

 

A

    5.5%  

BBB

    68.2%  

BB or Lower

    26.3%  

Total

    100%  
 

 

1 Includes 2.4% (as a percentage of total investments) in emerging market countries.

 

NUVEEN     25  


JPT

 

Nuveen Preferred and Income 2022 Term Fund

Performance Overview and Holding Summaries as of January 31, 2018

 

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.

Average Annual Total Returns as of January 31, 2018

 

    Cumulative      Average Annual  
     6-Month      1-Year               Since
Inception
 
JPI at Common Share NAV     0.13%        7.06%                  6.73%  
JPI at Common Share Price     (3.68)%        0.13%                  (0.26)%  
ICE BofAML U.S. All Capital Securities Index     0.26%        7.07%                  7.24%  

Since inception returns are from 1/26/17. Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.

Common Share Price Performance — Weekly Closing Price

 

LOGO

 

  26     NUVEEN


 

This data relates to the securities held in the Fund’s portfolio of investments as of the end of the reporting period. It should not be construed as a measure of performance for the Fund itself. Holdings are subject to change.

For financial reporting purposes, the ratings disclosed are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.

 

Fund Allocation

(% of net assets)

 

$1,000 Par (or similar) Institutional Preferred

    97.5%  

$25 Par (or similar) Retail Preferred

    25.8%  

Repurchase Agreements

    1.2%  

Other Assets Less Liabilities

    0.5%  

Net Assets Plus Borrowings

    125.0%  

Borrowings

    (25.0)%  

Net Assets

    100%  

Portfolio Composition

(% of total investments)

 

Banks

    33.4%  

Insurance

    20.8%  

Capital Markets

    10.7%  

Food Products

    7.2%  

Diversified Financial Services

    4.6%  
U.S. Agency     3.3%  

Other

    19.0%  

Repurchase Agreements

    1.0%  

Total

    100%  

Country Allocation1

(% of total investments)

 

United States     73.4%  
United Kingdom     6.8%  
Australia     5.4%  
France     4.3%  
Canada     2.7%  
Other     7.4%  

Total

    100%  
 

 

Top Five Issuers

(% of total long-term investments)

 

Bank of America Corporation

    4.8%  

Morgan Stanley

    4.4%  

Wells Fargo & Company

    4.3%  

Assured Guaranty Limited

    4.3%  

Citigroup Inc.

    4.2%  

Portfolio Credit Quality

(% of total long-term
fixed-income investments)

 

A

    9.9%  

BBB

    58.9%  

BB or Lower

    27.2%  
N/R (not rated)     4.0%  

Total

    100%  
 

 

1 Includes 1.8% (as a percentage of total investments) in emerging market countries.

 

NUVEEN     27  


JPC

 

Nuveen Preferred and Income Opportunities Fund

  

Portfolio of Investments

   January 31, 2018 (Unaudited)

 

Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

LONG-TERM INVESTMENTS – 147.7% (98.7% of Total Investments)

 

 

$1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 68.6% (45.8% of Total Investments)

 

      Automobiles – 1.7%                           
$ 17,805    

General Motors Financial Company Inc.

    5.750%        N/A (3)        BB+      $ 18,383,662  
      Banks – 33.2%                           
  33,945    

Bank of America Corporation, (4)

    6.500%        N/A (3)        BBB–        37,975,968  
  9,265    

Bank of America Corporation

    6.300%        N/A (3)        BBB–        10,376,800  
  3,535    

Bank of America Corporation

    8.000%        N/A (3)        BBB–        3,582,475  
  1,895    

Bank of America Corporation, (5)

    8.125%        N/A (3)        BBB–        1,932,900  
  3,575    

Barclays Bank PLC, 144A, (5)

    10.180%        6/12/21        A–        4,313,942  
  10,675    

CIT Group Inc., Series A

    5.800%        N/A (3)        B+        10,888,500  
  16,975    

Citigroup Inc.

    6.250%        N/A (3)        BB+        18,460,312  
  8,885    

Citigroup Inc.

    6.125%        N/A (3)        BB+        9,394,999  
  805    

Citigroup Inc.

    5.950%        N/A (3)        BB+        840,219  
  13,690    

Citigroup Inc.

    5.875%        N/A (3)        BB+        14,169,150  
  2,925    

Citigroup Inc.

    5.800%        N/A (3)        BB+        3,031,031  
  8,414    

Citizens Financial Group Inc.

    5.500%        N/A (3)        BB+        8,642,861  
  4,690    

Cobank Agricultural Credit Bank, (4)

    6.250%        N/A (3)        BBB+        5,114,674  
  4,960    

Commerzbank AG, 144A, (5)

    8.125%        9/19/23        BBB        5,914,540  
  4,204    

HSBC Capital Funding LP, Debt, 144A

    10.176%        N/A (3)        BBB+        6,810,480  
  32,580    

JP Morgan Chase & Company

    6.750%        N/A (3)        BBB–        36,408,150  
  125    

JP Morgan Chase & Company

    6.100%        N/A (3)        BBB–        133,359  
  11,290    

JP Morgan Chase & Company

    5.300%        N/A (3)        BBB–        11,631,523  
  10,575    

JP Morgan Chase & Company

    7.900%        N/A (3)        BBB–        10,720,406  
  4,485    

KeyCorp Convertible Preferred Stock

    5.000%        N/A (3)        Baa3        4,563,488  
  22,925    

Lloyds Bank PLC, 144A, (4)

    12.000%        N/A (3)        BBB–        30,597,700  
  6,520    

M&T Bank Corporation, (4)

    6.450%        N/A (3)        Baa2        7,359,450  
  5,715    

M&T Bank Corporation

    5.125%        N/A (3)        Baa2        5,999,321  
  3,655    

PNC Financial Services

    5.000%        N/A (3)        Baa2        3,832,268  
  26,603    

PNC Financial Services Inc., (4)

    6.750%        N/A (3)        Baa2        29,030,523  
  4,633    

Royal Bank of Scotland Group PLC

    7.648%        N/A (3)        Ba2        6,092,395  
  5,325    

SunTrust Bank Inc.

    5.625%        N/A (3)        Baa3        5,524,688  
  8,450    

SunTrust Bank Inc.

    5.050%        N/A (3)        Baa3        8,471,125  
  250    

US Bancorp, Convertible Bonds, Floating Rate

    5.125%        N/A (3)        A3        259,375  
  3,750    

Wachovia Capital Trust III

    5.570%        N/A (3)        Baa2        3,767,813  
  5,465    

Wells Fargo & Company

    7.980%        N/A (3)        Baa2        5,516,371  
  4,605    

Wells Fargo & Company

    5.900%        N/A (3)        Baa2        4,876,695  
  35,380    

Wells Fargo & Company, (4)

    5.875%        N/A (3)        Baa2        38,482,826  
  9,666    

Zions Bancorporation

    7.200%        N/A (3)        BB–        10,825,920  
 

Total Banks

                               365,542,247  
      Capital Markets – 2.2%                           
  2,320    

Bank of New York Mellon

    4.950%        N/A (3)        Baa1        2,372,780  
  11,375    

Goldman Sachs Group Inc.

    5.375%        N/A (3)        Ba1        11,744,687  
  2,945    

Goldman Sachs Group Inc.

    5.300%        N/A (3)        Ba1        3,066,481  
  5,140    

Morgan Stanley

    5.550%        N/A (3)        BB+        5,313,475  
  1,725    

State Street Corporation

    5.250%        N/A (3)        Baa1        1,798,313  
 

Total Capital Markets

                               24,295,736  
      Commercial Services & Supplies – 0.6%                           
  6,430    

AerCap Global Aviation Trust, 144A, (5)

    6.500%        6/15/45        BB        7,008,700  
      Consumer Finance – 2.5%                           
  4,396    

American Express Company

    5.200%        N/A (3)        Baa2        4,500,405  
  2,160    

American Express Company

    4.900%        N/A (3)        Baa2        2,192,400  

 

  28     NUVEEN


Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Consumer Finance (continued)                           
$ 12,455    

Capital One Financial Corporation

    5.550%        N/A (3)        Baa3      $ 12,859,787  
  7,920    

Discover Financial Services

    5.500%        N/A (3)        BB–        8,043,751  
 

Total Consumer Finance

                               27,596,343  
      Diversified Financial Services – 3.2%                           
  5,670    

BNP Paribas, 144A

    7.195%        N/A (3)        BBB        6,555,938  
  14,800    

Compeer Financial ACA., 144A, (5)

    6.750%        N/A (3)        BB        16,176,400  
  2,300    

Depository Trust & Clearing Corporation, 144A

    4.875%        N/A (3)        A        2,369,000  
  7,443    

Rabobank Nederland, 144A

    11.000%        N/A (3)        Baa2        8,215,211  
  1,955    

Voya Financial Inc., (5)

    5.650%        5/15/53        Baa3        2,077,188  
 

Total Diversified Financial Services

                               35,393,737  
      Electric Utilities – 3.0%                           
  3,620    

Electricite de France, 144A

    5.250%        N/A (3)        BBB        3,719,550  
  25,485    

Emera, Inc., (4), (5)

    6.750%        6/15/76        BBB–        28,798,050  
 

Total Electric Utilities

                               32,517,600  
      Energy Equipment & Services – 0.7%                           
  7,571    

Transcanada Trust, (4), (5)

    5.875%        8/15/76        BBB        8,244,819  
      Equity Real Estate Investment Trusts – 1.3%                           
  12    

Sovereign Real Estate Investment Trust, 144A

    12.000%        N/A (3)        Ba1        14,660,513  
      Food Products – 4.5%                           
  2,245    

Dairy Farmers of America Inc., 144A

    7.125%        N/A (3)        Baa3        2,475,113  
  6,490    

Land O’ Lakes Incorporated, 144A

    7.250%        N/A (3)        BB        7,220,125  
  34,865    

Land O’ Lakes Incorporated, 144A

    8.000%        N/A (3)        BB        39,571,774  
 

Total Food Products

                               49,267,012  
      Industrial Conglomerates – 3.6%                           
  39,156    

General Electric Capital Corporation

    5.000%        N/A (3)        A–        39,547,560  
      Insurance – 10.6%                           
  1,205    

AXA SA, (5)

    8.600%        12/15/30        A3        1,714,354  
  29,510    

Financial Security Assurance Holdings, 144A, (5)

    6.400%        12/15/66        BBB+        29,362,450  
  7,000    

Friends Life Group PLC, Reg S

    7.875%        N/A (3)        A–        7,255,500  
  2,108    

La Mondiale SAM, Reg S

    7.625%        N/A (3)        BBB        2,215,065  
  7,117    

Liberty Mutual Group, 144A, (4)

    7.800%        3/15/37        Baa3        9,003,005  
  9,335    

MetLife Capital Trust IV, 144A, (4)

    7.875%        12/15/37        BBB        12,304,697  
  4,425    

MetLife Inc.

    5.250%        N/A (3)        BBB        4,547,130  
  5,760    

MetLife Inc., 144A, (4), (5)

    9.250%        4/08/38        BBB        8,460,000  
  1,150    

Nationwide Financial Services Capital Trust, (4), (5)

    7.899%        3/01/37        Baa2        1,273,794  
  9,550    

Nationwide Financial Services Inc., (4)

    6.750%        5/15/37        Baa2        10,696,000  
  900    

Principal Financial Group

    4.700%        5/15/55        Baa2        918,000  
  6,855    

Provident Financing Trust I, (5)

    7.405%        3/15/38        Baa3        7,832,523  
  3,315    

Prudential Financial Inc., (5)

    5.875%        9/15/42        BBB+        3,629,925  
  1,270    

Prudential Financial Inc., (5)

    5.625%        6/15/43        BBB+        1,381,379  
  2,540    

QBE Insurance Group Limited, Reg S

    6.750%        12/02/44        BBB        2,858,770  
  11,875    

QBE Insurance Group Limited, 144A, (5)

    7.500%        11/24/43        Baa2        13,671,094  
 

Total Insurance

                               117,123,686  
      Machinery – 0.2%                           
  2,215    

Stanley Black & Decker Inc., (5)

    5.750%        12/15/53        BBB+        2,281,450  
      Media – 0.1%                           
  1,285    

Viacom Inc., (5)

    5.875%        2/28/57        Ba1        1,305,133  
      Metals & Mining – 0.5%                           
  4,625    

BHP Billiton Finance USA Limited, 144A

    6.250%        10/19/75        A–        4,966,094  

 

NUVEEN     29  


JPC    Nuveen Preferred and Income Opportunities Fund   
   Portfolio of Investments (continued)    January 31, 2018 (Unaudited)

 

Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Oil, Gas & Consumable Fuels – 0.2%                           
$ 1,790    

Enterprise Products Operating LLP, (5)

    5.250%        8/16/77        Baa2      $ 1,785,525  
      U.S. Agency – 0.5%                           
  4,700    

Farm Credit Bank of Texas, 144A, (5)

    10.000%        N/A (3)        Baa1        5,522,500  
 

Total $1,000 Par (or similar) Institutional Preferred (cost $709,657,950)

 

              755,442,317  
Shares     Description (1)   Coupon              Ratings (2)      Value  
 

$25 PAR (OR SIMILAR) RETAIL PREFERRED – 43.5% (29.1% of Total Investments)

 

      Banks – 11.1%                           
  134,000    

Cowen Group, Inc.

    7.350%           N/R      $ 3,370,100  
  126,000    

AgriBank FCB, (6)

    6.875%           BBB+        13,812,750  
  86,444    

Boston Private Financial Holdings Inc.

    6.950%           N/R        2,220,746  
  148,791    

Citigroup Inc.

    8.125%           BB+        3,791,195  
  538,298    

Citigroup Inc., (5)

    7.125%           BB+        15,201,535  
  172,975    

Cobank Agricultural Credit Bank, 144A, (6)

    6.250%           BBB+        18,378,594  
  73,511    

Cobank Agricultural Credit Bank, (6)

    6.200%           BBB+        7,865,677  
  38,725    

Cobank Agricultural Credit Bank, (6)

    6.125%           BBB+        3,882,181  
  148,251    

Countrywide Capital Trust III

    7.000%           BBB–        3,792,261  
  218,164    

Fifth Third Bancorp., (5)

    6.625%           Baa3        6,169,678  
  178,757    

FNB Corporation, (4)

    7.250%           Ba2        5,323,383  
  138,932    

HSBC Holdings PLC, (5)

    8.000%           BBB+        3,698,370  
  434,200    

Huntington BancShares Inc.

    6.250%           Baa3        11,601,824  
  109,175    

KeyCorp Preferred Stock, (5)

    6.125%           Baa3        3,084,740  
  82,000    

People’s United Financial, Inc., (5)

    5.625%           BB+        2,132,000  
  363,549    

Regions Financial Corporation, (5)

    6.375%           BB+        9,993,962  
  113,600    

U.S. Bancorp., (5)

    6.500%           A3        3,148,992  
  140,652    

Western Alliance Bancorp., (4)

    6.250%           N/R        3,607,724  
  39,465    

Zions Bancorporation, (5)

    6.300%                 BB–        1,059,635  
 

Total Banks

                               122,135,347  
      Capital Markets – 8.2%                           
  159,589    

Apollo Investment Corporation, (4)

    6.875%           BBB–        4,085,478  
  170,450    

B. Riley Financial Inc.

    7.250%           N/R        4,269,773  
  142,980    

B. Riley Financial, Inc.

    7.500%           N/R        3,610,245  
  134,939    

Charles Schwab Corporation

    6.000%           BBB        3,539,450  
  129,169    

Charles Schwab Corporation, (4)

    5.950%           BBB        3,398,436  
  74,600    

Goldman Sachs Group, Inc.

    5.500%           Ba1        1,943,330  
  116,034    

Hercules Technology Growth Capital Incorporated, (4)

    6.250%           BBB–        2,941,462  
  370,280    

Ladenburg Thalmann Financial Services Inc.

    8.000%           N/R        9,386,598  
  1,054,488    

Morgan Stanley, (4), (5)

    7.125%           BB+        30,000,183  
  269,900    

Morgan Stanley, (5)

    6.875%           BB+        7,573,394  
  221,100    

Morgan Stanley, (5)

    5.850%           BB+        5,781,765  
  74,448    

Northern Trust Corporation, (5)

    5.850%           BBB+        1,955,004  
  145,905    

Oaktree Specialty Lending Corporation, (4)

    6.125%           BB        3,611,149  
  51,445    

State Street Corporation, (5)

    5.350%           Baa1        1,353,004  
  138,364    

Stifel Financial Corporation, (5)

    6.250%           BB–        3,625,137  
  111,601    

Triangle Capital Corporation, (4)

    6.375%                 N/R        2,801,185  
 

Total Capital Markets

                               89,875,593  
      Consumer Finance – 3.3%                           
  169,911    

Capital One Financial Corporation, (5)

    6.700%           Baa3        4,502,642  
  1,219,645    

GMAC Capital Trust I, (4)

    5.785%                 B+        31,735,163  
 

Total Consumer Finance

                               36,237,805  
      Diversified Financial Services – 0.3%                           
  141,562    

Main Street Capital Corporation, (5)

    6.125%                 N/R        3,738,652  

 

  30     NUVEEN


Shares     Description (1)   Coupon              Ratings (2)      Value  
      Diversified Telecommunication Services – 1.0%                           
  334,132    

Qwest Corporation, (4)

    7.000%           BBB–      $ 7,264,030  
  197,715    

Qwest Corporation, (4)

    6.875%                 BBB–        4,244,941  
 

Total Diversified Telecommunication Services

                               11,508,971  
      Equity Real Estate Investment Trusts – 0.4%                           
  46,684    

Colony Northstar, Inc., (4)

    8.250%           N/R        1,175,970  
  147,988    

Senior Housing Properties Trust, (4), (5)

    5.625%                 BBB–        3,684,901  
 

Total Equity Real Estate Investment Trusts

                               4,860,871  
      Food Products – 3.9%                           
  365,568    

CHS Inc., (4), (5)

    7.875%           N/R        10,517,391  
  517,590    

CHS Inc., (5)

    7.100%           N/R        13,995,634  
  486,440    

CHS Inc., (5)

    6.750%           N/R        12,822,559  
  23,000    

Dairy Farmers of America Inc., 144A, (6)

    7.875%           Baa3        2,367,057  
  24,500    

Dairy Farmers of America Inc., 144A, (6)

    7.875%                 Baa3        2,804,103  
 

Total Food Products

                               42,506,744  
      Insurance – 8.6%                           
  23,337    

Allstate Corporation

    6.750%           BBB–        600,694  
  302,283    

Argo Group US Inc., (4)

    6.500%           BBB–        7,653,806  
  394,916    

Aspen Insurance Holdings Limited, (5)

    5.950%           BBB–        10,315,206  
  73,500    

Aspen Insurance Holdings Limited, (5)

    5.625%           BBB–        1,814,715  
  125,700    

Axis Capital Holdings Limited, (5)

    5.500%           BBB        3,043,197  
  56,900    

Delphi Financial Group, Inc., (5), (6)

    1.872%           BB+        1,322,925  
  217,135    

Hartford Financial Services Group Inc., (4), (5)

    7.875%           BBB–        6,305,600  
  604,007    

Kemper Corporation, (4)

    7.375%           Ba1        15,553,180  
  365,333    

Maiden Holdings Limited, (5)

    8.250%           N/R        8,263,833  
  315,441    

Maiden Holdings NA Limited, (4)

    7.750%           N/R        6,942,857  
  106,195    

National General Holding Company

    7.625%           N/R        2,623,547  
  76,400    

National General Holding Company, (5)

    7.500%           N/R        1,834,364  
  153,954    

National General Holding Company, (5)

    7.500%           N/R        3,659,487  
  104,443    

PartnerRe Limited, (4), (5)

    7.250%           Baa2        2,876,360  
  199,596    

Reinsurance Group of America Inc., (4), (5)

    6.200%           BBB        5,556,752  
  411,700    

Reinsurance Group of America, Inc., (4), (5)

    5.750%           BBB        11,074,730  
  220,272    

Torchmark Corporation, (4), (5)

    6.125%                 BBB+        5,731,477  
 

Total Insurance

                               95,172,730  
      Mortgage Real Estate Investment Trusts – 0.9%                           
  178,638    

Arbor Realty Trust Incorporated

    7.375%           N/R        4,560,628  
  96,986    

MFA Financial Inc., (5)

    8.000%           N/R        2,510,968  
  107,000    

Wells Fargo REIT, (5)

    6.375%                 BBB        2,755,250  
 

Total Mortgage Real Estate Investment Trusts

                               9,826,846  
      Oil, Gas & Consumable Fuels – 0.9%                           
  80,400    

Nustar Energy LP, (5)

    8.500%           B1        2,027,688  
  50,000    

Nustar Energy LP

    7.625%           B1        1,181,500  
  256,105    

Nustar Logistics Limited Partnership, (5)

    8.456%                 B+        6,497,384  
 

Total Oil, Gas & Consumable Fuels

                               9,706,572  
      Thrifts & Mortgage Finance – 1.5%                           
  194,503    

Federal Agricultural Mortgage Corporation, (4), (5)

    6.875%           N/R        5,280,756  
  143,124    

Federal Agricultural Mortgage Corporation, (5)

    6.000%           N/R        3,828,567  
  279,100    

New York Community Bancorp Inc., (5)

    6.375%                 Ba1        7,812,009  
 

Total Thrifts & Mortgage Finance

                               16,921,332  
      U.S. Agency – 2.4%                           
  246,300    

Farm Credit Bank of Texas, 144A, (6)

    6.750%                 Baa1        26,785,125  

 

NUVEEN     31  


JPC    Nuveen Preferred and Income Opportunities Fund   
   Portfolio of Investments (continued)    January 31, 2018 (Unaudited)

 

Shares     Description (1)   Coupon              Ratings (2)      Value  
      Wireless Telecommunication Services – 1.0%                           
  415,473    

United States Cellular Corporation, (4)

    7.250%                 Ba1      $ 10,424,218  
 

Total $25 Par (or similar) Retail Preferred (cost $464,845,098)

 

     479,700,806  
Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

CONTINGENT CAPITAL SECURITIES – 24.2% (16.2% of Total Investments) (7)

 

  
      Banks – 19.9%                           
$ 2,820    

Australia and New Zealand Banking Group Limited of the
United Kingdom, 144A

    6.750%        N/A (3)        Baa2      $ 3,176,025  
  7,916    

Banco Bilbao Vizcaya Argentaria S.A

    6.125%        N/A (3)        Ba2        8,236,598  
  3,600    

Banco Bilbao Vizcaya Argentaria S.A, Reg S

    9.000%        N/A (3)        BB        3,649,853  
  1,205    

Banco Mercantil del Norte, 144A

    7.625%        N/A (3)        BB        1,335,441  
  1,200    

Banco Santander SA, Reg S

    6.375%        N/A (3)        Ba1        1,226,472  
  8,110    

Barclays PLC, Reg S

    7.875%        N/A (3)        BB+        8,866,176  
  14,135    

Barclays PLC

    8.250%        N/A (3)        BB+        14,718,633  
  12,535    

Credit Agricole SA, 144A

    8.125%        N/A (3)        BBB–        15,007,103  
  9,585    

Credit Agricole SA, 144A

    7.875%        N/A (3)        BBB–        10,885,224  
  1,750    

HSBC Holdings PLC

    6.000%        N/A (3)        BBB        1,830,938  
  5,115    

HSBC Holdings PLC

    6.875%        N/A (3)        BBB        5,492,231  
  5,055    

ING Groep N.V

    6.500%        N/A (3)        BBB–        5,446,763  
  1,000    

ING Groep N.V, Reg S

    6.875%        N/A (3)        BBB–        1,083,804  
  22,550    

Intesa Sanpaolo SpA, 144A

    7.700%        N/A (3)        BB–        25,086,874  
  24,470    

Lloyds Banking Group PLC

    7.500%        N/A (3)        BB+        27,620,513  
  5,000    

Nordea Bank AB, 144A

    6.125%        N/A (3)        BBB        5,365,250  
  8,405    

Royal Bank of Scotland Group PLC

    8.625%        N/A (3)        Ba3        9,382,081  
  1,500    

Royal Bank of Scotland Group PLC

    8.000%        N/A (3)        Ba3        1,716,570  
  11,105    

Royal Bank of Scotland Group PLC

    7.500%        N/A (3)        Ba3        11,757,419  
  9,846    

Societe Generale, 144A

    7.875%        N/A (3)        BB+        11,150,595  
  7,795    

Societe Generale, 144A

    7.375%        N/A (3)        BB+        8,408,856  
  6,485    

Standard Chartered PLC, 144A

    7.750%        N/A (3)        Ba1        7,133,500  
  2,660    

Standard Chartered PLC, 144A

    7.500%        N/A (3)        Ba1        2,866,150  
  2,600    

Standard Chartered PLC, 144A

    6.500%        N/A (3)        Ba1        2,678,380  
  22,575    

UniCredit SpA, Reg S

    8.000%        N/A (3)        B+        25,078,613  
  199,017    

Total Banks

                               219,200,062  
      Capital Markets – 3.3%                           
  1,600    

Credit Suisse Group AG, Reg S

    7.125%        N/A (3)        Ba2        1,742,000  
  12,820    

Credit Suisse Group AG, 144A

    7.500%        N/A (3)        BB        14,582,750  
  2,900    

Macquarie Bank Limited, 144A

    6.125%        N/A (3)        Ba1        3,008,750  
  4,355    

UBS Group AG, Reg S

    7.125%        N/A (3)        BBB–        4,586,991  
  11,230    

UBS Group AG, Reg S

    7.000%        N/A (3)        BBB–        12,689,900  
  32,905    

Total Capital Markets

                               36,610,391  
      Diversified Financial Services – 1.0%                           
  6,065    

BNP Paribas, 144A

    7.375%        N/A (3)        BBB–        6,967,169  
  3,170    

BNP Paribas, 144A

    7.625%        N/A (3)        BBB–        3,459,263  
  9,235    

Total Diversified Financial Services

                               10,426,432  
$ 241,157    

Total Contingent Capital Securities (cost $253,643,559)

 

     266,236,885  
Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

CORPORATE BONDS – 10.0% (6.7% of Total Investments)

 

      Automobiles – 0.3%                           
$ 2,825    

Ford Motor Company

    7.450%        7/16/31        BBB      $ 3,590,586  

 

  32     NUVEEN


Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Biotechnology – 0.3%                           
$ 3,500    

AMAG Pharmaceuticals Inc., 144A, (4)

    7.875%        9/01/23        Ba3      $ 3,325,000  
      Capital Markets – 0.4%                           
  3,960    

Donnelley Financial Solutions, Inc., (4)

    8.250%        10/15/24        B        4,187,700  
      Chemicals – 0.5%                           
  4,675    

CVR Partners LP / CVR Nitrogen Finance Corp., 144A, (4)

    9.250%        6/15/23        B+        4,996,406  
      Commercial Services & Supplies – 0.6%                           
  6,040    

GFL Environmental Corporation, 144A, (4)

    9.875%        2/01/21        B–        6,364,650  
      Consumer Finance – 0.7%                           
  6,975    

Navient Corporation, (4)

    8.000%        3/25/20        BB        7,539,626  
      Diversified Telecommunication Services – 0.2%                           
  2,300    

Frontier Communications Corporation, (4)

    11.000%        9/15/25        B+        1,799,750  
      Equity Real Estate Investment Trusts – 0.7%                           
  8,175    

Communications Sales & Leasing Inc., (4)

    8.250%        10/15/23        BB–        7,745,813  
      Food Products – 0.1%                           
  1,310    

Land O Lakes Capital Trust I, 144A, (5)

    7.450%        3/15/28        Ba1        1,486,850  
      Health Care Providers & Services – 0.7%                           
  7,720    

Kindred Healthcare Inc., (4)

    8.000%        1/15/20        B–        8,236,275  
      Insurance – 0.2%                           
  2,010    

Security Benefit Life Insurance Company, 144A, (5)

    7.450%        10/01/33        BBB        2,436,737  
      IT Services – 0.2%                           
  2,350    

First Data Corporation, 144A

    7.000%        12/01/23        B        2,474,856  
      Media – 1.6%                           
  10,425    

Dish DBS Corporation, (4)

    7.750%        7/01/26        Ba3        10,711,687  
  5,875    

Viacom Inc., (4)

    6.875%        4/30/36        BBB        6,996,663  
  16,300    

Total Media

                               17,708,350  
      Oil, Gas & Consumable Fuels – 0.7%                           
  7,200    

Enviva Parnters LP / Enviva Partners Finance Corp.

    8.500%        11/01/21        BB–        7,695,000  
      Software – 0.4%                           
  4,175    

Conduent Finance Inc. / Xerox Business Services LLC, 144A, (4)

    10.500%        12/15/24        BB        4,875,565  
      Specialty Retail – 0.6%                           
  6,450    

L Brands, Inc., (4)

    6.875%        11/01/35        BB+        6,595,125  
      Technology Hardware, Storage & Peripherals – 1.5%                           
  13,885    

Western Digital Corporation, (4)

    10.500%        4/01/24        Baa3        16,235,036  
      Wireless Telecommunication Services – 0.3%                           
  3,375    

Altice Financing SA, 144A, (4)

    7.500%        5/15/26        BB–        3,503,689  
$ 103,225    

Total Corporate Bonds (cost $109,831,291)

                               110,797,014  

 

NUVEEN     33  


JPC    Nuveen Preferred and Income Opportunities Fund   
   Portfolio of Investments (continued)    January 31, 2018 (Unaudited)

 

Shares     Description (1)   Coupon              Ratings (2)      Value  
 

CONVERTIBLE PREFERRED SECURITIES – 1.1% (0.7% of Total Investments)

 

      Electric Utilities – 1.1%                           
  167,100    

NextEra Energy Inc., (4)

    6.371%                 BBB      $ 11,857,416  
 

Total Convertible Preferred Securities (cost $10,100,296)

                               11,857,416  
Shares     Description (1)                           Value  
 

COMMON STOCKS – 0.3% (0.2% of Total Investments)

          
      Capital Markets – 0.3%                           
  184,035    

Ares Capital Corporation, (5)

                             $ 2,935,358  
 

Total Common Stocks (cost $3,036,662)

                               2,935,358  
 

Total Long-Term Investments (cost $1,551,114,856)

                               1,626,969,796  
Principal
Amount (000)
    Description (1)   Coupon      Maturity              Value  
 

SHORT-TERM INVESTMENTS – 2.0% (1.3% of Total Investments)

          
 

REPURCHASE AGREEMENTS – 2.0% (1.3% of Total Investments)

          
$ 21,717    

Repurchase Agreement with Fixed Income Clearing Corporation,
dated 1/31/18, repurchase price $21,717,365,
collateralized by: $3,575,000 U.S. Treasury Notes,
1.875%, due 9/30/22, value $3,500,669;
$18,955,000 U.S. Treasury Notes,
1.875%, due 3/31/22, value $18,652,364

    0.540%        2/01/18               $ 21,717,039  
 

Total Short-Term Investments (cost $21,717,039)

                               21,717,039  
 

Total Investments (cost $1,572,831,895) – 149.7%

                               1,648,686,835  
 

Borrowings – (39.7)% (8), (9)

                               (437,000,000
 

Reverse Repurchase Agreements – (11.4)% (10)

                               (125,000,000
 

Other Assets Less Liabilities – 1.4% (11)

                               14,541,215  
 

Net Assets Applicable to Common Shares – 100%

                             $ 1,101,228,050  

Investments in Derivatives

Interest Rate Swaps – OTC Uncleared

 

Counterparty   Notional
Amount
    Fund
Pay/Receive
Floating Rate
    Floating Rate Index     Fixed Rate
(Annualized)
    Fixed Rate
Payment
Frequency
    Effective
Date (12)
    Optional
Termination
Date
    Maturity
Date
    Value     Unrealized
Appreciation
(Depreciation)
 

Morgan Stanley Capital Services, LLC

  $ 277,500,000       Receive       1-Month LIBOR       1.994     Monthly       6/01/18       7/01/25       7/01/27     $ 9,697,121     $ 9,697,121  

Total unrealized appreciation on interest rate swaps

 

                                                          $ 9,697,121  

 

  34     NUVEEN


 

For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.

 

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted.

 

(2) For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.

 

(3) Perpetual security. Maturity date is not applicable.

 

(4) Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in reverse repurchase agreements. As of the end of the reporting period, investments with a value of $291,700,080 have been pledged as collateral for reverse repurchase agreements.

 

(5) Investment, or portion of investment, is hypothecated as described in the Notes to Financial Statements, Note 8 – Fund Leverage, Rehypothecation. The total value of investments hypothecated as of the end of the reporting period was $342,175,999.

 

(6) For fair value measurement disclosure purposes, investment classified as Level 2. See Notes to Financial Statements, Note 2 – Investment Valuation and Fair Value Measurements for more information.

 

(7) Contingent Capital Securities (“CoCos”) are hybrid securities with loss absorption characteristics built into the terms for the benefit of the issuer. For example the terms may specify an automatic write-down of principal or a mandatory conversion into the issuer’s common stock under certain adverse circumstances, such as the issuer’s capital ratio falling below a specified level.

 

(8) The Fund may pledge up to 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives, when applicable) in the Portfolio of Investments as collateral for borrowings. As of the end of the reporting period, investments with a value of $1,076,388,657 have been pledged as collateral for borrowings.

 

(9) Borrowings as a percentage of Total Investments is 26.5%.

 

(10) Reverse Repurchase Agreements as a percentage of Total Investments is 7.6%.

 

(11) Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter (“OTC”) derivatives as presented on the Statement of Assets and Liabilities, when applicable. The unrealized appreciation (depreciation) of OTC cleared and exchange-traded derivatives is recognized as part of the cash collateral at brokers and/or the receivable or payable for variation margin as presented on the Statement of Assets and Liabilities, when applicable.

 

(12) Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each contract.

 

144A Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers.

 

Reg S Regulation S allows U.S. companies to sell securities to persons or entities located outside of the United States without registering those securities with the Securities and Exchange Commission. Specifically, Regulation S provides a safe harbor from the registration requirements of the Securities Act for the offers and sales of securities by both foreign and domestic issuers that are made outside the United States.

 

LIBOR London Inter-Bank Offered Rate

 

REIT Real Estate Investment Trust

 

See accompanying notes to financial statements.

 

NUVEEN     35  


JPI

 

Nuveen Preferred and Income Term Fund

  

Portfolio of Investments

   January 31, 2018 (Unaudited)

 

Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

LONG-TERM INVESTMENTS – 136.7% (99.7% of Total Investments)

 

 

$1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 63.8% (46.5% of Total Investments)

 

      Automobiles – 1.1%                           
$ 6,120    

General Motors Financial Company Inc.

    5.750%        N/A (3)        BB+      $ 6,318,900  
      Banks – 24.7%                           
  5,720    

Bank of America Corporation

    6.500%        N/A (3)        BBB–        6,399,250  
  5,675    

Bank of America Corporation

    6.300%        N/A (3)        BBB–        6,356,000  
  3,366    

Bank of America Corporation

    8.000%        N/A (3)        BBB–        3,411,205  
  870    

Bank of America Corporation

    8.125%        N/A (3)        BBB–        887,400  
  4,000    

Barclays Bank PLC, 144A, (4)

    10.180%        6/12/21        A–        4,826,788  
  9,315    

Citigroup Inc.

    6.125%        N/A (3)        BB+        9,849,681  
  510    

Citigroup Inc.

    5.950%        N/A (3)        BB+        532,313  
  10,935    

Citigroup Inc.

    5.875%        N/A (3)        BB+        11,317,724  
  4,540    

Citizens Financial Group Inc.

    5.500%        N/A (3)        BB+        4,663,488  
  4,265    

Commerzbank AG, 144A

    8.125%        9/19/23        BBB        5,085,789  
  4,351    

HSBC Capital Funding LP, Debt, 144A

    10.176%        N/A (3)        BBB+        7,048,620  
  13,479    

JP Morgan Chase & Company

    6.750%        N/A (3)        BBB–        15,062,782  
  12,425    

JP Morgan Chase & Company

    5.300%        N/A (3)        BBB–        12,800,855  
  3,670    

KeyCorp Convertible Preferred Stock

    5.000%        N/A (3)        Baa3        3,734,225  
  3,000    

Lloyds Bank PLC, 144A

    12.000%        N/A (3)        BBB–        4,004,061  
  1,340    

M&T Bank Corporation

    6.450%        N/A (3)        Baa2        1,512,525  
  5,010    

M&T Bank Corporation

    5.125%        N/A (3)        Baa2        5,259,248  
  3,895    

PNC Financial Services

    5.000%        N/A (3)        Baa2        4,083,908  
  4,855    

PNC Financial Services Inc.

    6.750%        N/A (3)        Baa2        5,298,019  
  4,201    

Royal Bank of Scotland Group PLC

    7.648%        N/A (3)        Ba2        5,524,315  
  4,980    

SunTrust Bank Inc.

    5.050%        N/A (3)        Baa3        4,992,450  
  270    

US Bancorp, Convertible Bonds, Floating Rate

    5.125%        N/A (3)        A3        280,125  
  3,010    

Wachovia Capital Trust III

    5.570%        N/A (3)        Baa2        3,024,298  
  4,478    

Wells Fargo & Company

    7.980%        N/A (3)        Baa2        4,519,589  
  4,131    

Wells Fargo & Company

    5.900%        N/A (3)        Baa2        4,374,729  
  9,465    

Wells Fargo & Company

    5.875%        N/A (3)        Baa2        10,295,080  
 

Total Banks

                               145,144,467  
      Capital Markets – 3.2%                           
  2,100    

Bank of New York Mellon

    4.950%        N/A (3)        Baa1        2,147,775  
  9,440    

Goldman Sachs Group Inc.

    5.375%        N/A (3)        Ba1        9,746,800  
  3,775    

Goldman Sachs Group Inc.

    5.300%        N/A (3)        Ba1        3,930,719  
  1,300    

Morgan Stanley

    5.550%        N/A (3)        BB+        1,343,875  
  1,355    

State Street Corporation

    5.250%        N/A (3)        Baa1        1,412,588  
 

Total Capital Markets

                               18,581,757  
      Commercial Services & Supplies – 1.0%                           
  5,495    

AerCap Global Aviation Trust, 144A

    6.500%        6/15/45        BB        5,989,550  
      Consumer Finance – 3.1%                           
  3,635    

American Express Company

    5.200%        N/A (3)        Baa2        3,721,331  
  2,000    

American Express Company

    4.900%        N/A (3)        Baa2        2,030,000  
  7,600    

Capital One Financial Corporation

    5.550%        N/A (3)        Baa3        7,847,000  
  4,465    

Discover Financial Services

    5.500%        N/A (3)        BB–        4,534,766  
 

Total Consumer Finance

                               18,133,097  
      Diversified Financial Services – 6.1%                           
  5,875    

BNP Paribas, 144A

    7.195%        N/A (3)        BBB        6,792,969  
  15,700    

Compeer Financial ACA., 144A

    6.750%        N/A (3)        BB        17,160,100  
  2,500    

Depository Trust & Clearing Corporation, 144A

    4.875%        N/A (3)        A        2,575,000  

 

  36     NUVEEN


Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Diversified Financial Services (continued)                           
$ 6,333    

Rabobank Nederland, 144A

    11.000%        N/A (3)        Baa2      $ 6,989,496  
  2,052    

Voya Financial Inc., (4)

    5.650%        5/15/53        Baa3        2,180,250  
 

Total Diversified Financial Services

                               35,697,815  
      Electric Utilities – 2.4%                           
  2,370    

Electricite de France, 144A

    5.250%        N/A (3)        BBB        2,435,175  
  10,525    

Emera, Inc., (4)

    6.750%        6/15/76        BBB–        11,893,250  
 

Total Electric Utilities

                               14,328,425  
      Equity Real Estate Investment Trusts – 2.6%                           
  12,298    

Sovereign Real Estate Investment Trust, 144A

    12.000%        N/A (3)        Ba1        15,403,245  
      Food Products – 3.3%                           
  2,360    

Dairy Farmers of America Inc., 144A

    7.125%        N/A (3)        Baa3        2,601,900  
  1,410    

Land O Lakes Capital Trust I, 144A, (4)

    7.450%        3/15/28        Ba1        1,600,350  
  3,120    

Land O’ Lakes Incorporated, 144A

    7.250%        N/A (3)        BB        3,471,000  
  10,170    

Land O’ Lakes Incorporated, 144A

    8.000%        N/A (3)        BB        11,542,950  
 

Total Food Products

                               19,216,200  
      Industrial Conglomerates – 3.4%                           
  19,872    

General Electric Capital Corporation

    5.000%        N/A (3)        A–        20,070,720  
      Insurance – 11.6%                           
  26,750    

Financial Security Assurance Holdings, 144A, (4)

    6.400%        12/15/66        BBB+        26,616,250  
  2,299    

La Mondiale SAM, Reg S

    7.625%        N/A (3)        BBB        2,415,766  
  3,655    

MetLife Inc.

    5.250%        N/A (3)        BBB        3,755,878  
  4,770    

MetLife Inc., 144A, (4)

    9.250%        4/08/38        BBB        7,005,938  
  7,703    

Provident Financing Trust I, (4)

    7.405%        3/15/38        Baa3        8,801,448  
  3,325    

Prudential Financial Inc., (4)

    5.875%        9/15/42        BBB+        3,640,875  
  2,335    

QBE Insurance Group Limited, Reg S

    6.750%        12/02/44        BBB        2,628,043  
  11,260    

QBE Insurance Group Limited, 144A, (4)

    7.500%        11/24/43        Baa2        12,963,074  
 

Total Insurance

                               67,827,272  
      Media – 0.3%                           
  1,935    

Viacom Inc.

    5.875%        2/28/57        Ba1        1,965,317  
      Metals & Mining – 0.8%                           
  4,370    

BHP Billiton Finance USA Limited, 144A

    6.250%        10/19/75        A–        4,692,288  
      U.S. Agency – 0.2%                           
  752    

Farm Credit Bank of Texas, 144A

    10.000%        N/A (3)        Baa1        883,600  
 

Total $1,000 Par (or similar) Institutional Preferred (cost $347,710,850)

 

     374,252,653  
Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

CONTINGENT CAPITAL SECURITIES – 40.4% (29.5% of Total Investments) (5)

 

     
      Banks – 32.8%                           
$ 2,450    

Australia and New Zealand Banking Group Limited of the United Kingdom, 144A

    6.750%        N/A (3)        Baa2      $ 2,759,313  
  6,959    

Banco Bilbao Vizcaya Argentaria S.A

    6.125%        N/A (3)        Ba2        7,240,631  
  2,600    

Banco Bilbao Vizcaya Argentaria S.A, Reg S

    9.000%        N/A (3)        BB        2,636,005  
  1,110    

Banco Mercantil del Norte, 144A

    7.625%        N/A (3)        BB        1,230,158  
  1,200    

Banco Santander SA, Reg S

    6.375%        N/A (3)        Ba1        1,226,472  
  6,145    

Barclays PLC, Reg S

    7.875%        N/A (3)        BB+        6,717,960  
  12,580    

Barclays PLC

    8.250%        N/A (3)        BB+        13,099,427  
  10,184    

Credit Agricole SA, 144A

    8.125%        N/A (3)        BBB–        12,192,448  
  8,175    

Credit Agricole SA, 144A

    7.875%        N/A (3)        BBB–        9,283,955  

 

NUVEEN     37  


JPI    Nuveen Preferred and Income Term Fund   
   Portfolio of Investments (continued)    January 31, 2018 (Unaudited)

 

Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Banks (continued)                           
$ 1,500    

HSBC Holdings PLC

    6.000%        N/A (3)        BBB      $ 1,569,375  
  3,790    

HSBC Holdings PLC

    6.875%        N/A (3)        BBB        4,069,513  
  6,890    

ING Groep N.V

    6.500%        N/A (3)        BBB–        7,423,975  
  1,000    

ING Groep N.V, Reg S

    6.875%        N/A (3)        BBB–        1,083,804  
  20,000    

Intesa Sanpaolo SpA, 144A

    7.700%        N/A (3)        BB–        22,250,000  
  22,460    

Lloyds Banking Group PLC

    7.500%        N/A (3)        BB+        25,351,725  
  4,390    

Nordea Bank AB, 144A

    6.125%        N/A (3)        BBB        4,710,690  
  5,360    

Royal Bank of Scotland Group PLC

    8.625%        N/A (3)        Ba3        5,983,100  
  6,000    

Royal Bank of Scotland Group PLC

    8.000%        N/A (3)        Ba3        6,866,280  
  5,970    

Royal Bank of Scotland Group PLC

    7.500%        N/A (3)        Ba3        6,320,738  
  8,878    

Societe Generale, 144A

    7.875%        N/A (3)        BB+        10,054,334  
  7,215    

Societe Generale, 144A

    7.375%        N/A (3)        BB+        7,783,181  
  5,600    

Standard Chartered PLC, 144A

    7.750%        N/A (3)        Ba1        6,160,000  
  2,530    

Standard Chartered PLC, 144A

    7.500%        N/A (3)        Ba1        2,726,075  
  2,240    

Standard Chartered PLC, 144A

    6.500%        N/A (3)        Ba1        2,307,527  
  19,515    

UniCredit SpA, Reg S

    8.000%        N/A (3)        B+        21,679,253  
  174,741    

Total Banks

                               192,725,939  
      Capital Markets – 5.9%                           
  1,400    

Credit Suisse Group AG, Reg S

    7.125%        N/A (3)        Ba2        1,524,250  
  11,007    

Credit Suisse Group AG, 144A

    7.500%        N/A (3)        BB        12,520,462  
  4,500    

Macquarie Bank Limited, 144A

    6.125%        N/A (3)        Ba1        4,668,750  
  3,762    

UBS Group AG, Reg S

    7.125%        N/A (3)        BBB–        3,962,402  
  10,635    

UBS Group AG, Reg S

    7.000%        N/A (3)        BBB–        12,017,550  
  31,304    

Total Capital Markets

                               34,693,414  
      Diversified Financial Services – 1.7%                           
  5,330    

BNP Paribas, 144A

    7.375%        N/A (3)        BBB–        6,122,837  
  3,360    

BNP Paribas, 144A

    7.625%        N/A (3)        BBB–        3,666,600  
  8,690    

Total Diversified Financial Services

                               9,789,437  
$ 214,735    

Total Contingent Capital Securities (cost $224,091,066)

                               237,208,790  
Shares     Description (1)   Coupon              Ratings (2)      Value  
 

$25 PAR (OR SIMILAR) RETAIL PREFERRED – 32.1% (23.4% of Total Investments)

 

     
      Banks – 9.4%                           
  115,900    

AgriBank FCB, (6)

    6.875%           BBB+      $ 12,705,537  
  274,167    

Citigroup Inc., (4)

    7.125%           BB+        7,742,476  
  155,800    

Cobank Agricultural Credit Bank, 144A, (6)

    6.250%           BBB+        16,553,750  
  40,797    

Cobank Agricultural Credit Bank, (6)

    6.200%           BBB+        4,365,279  
  107,726    

Fifth Third Bancorp., (4)

    6.625%           Baa3        3,046,491  
  157,500    

Huntington BancShares Inc.

    6.250%           Baa3        4,208,400  
  192,878    

Regions Financial Corporation, (4)

    6.375%           BB+        5,302,216  
  41,069    

Zions Bancorporation, (4)

    6.300%                 BB–        1,102,703  
 

Total Banks

                               55,026,852  
      Capital Markets – 4.4%                           
  54,600    

Goldman Sachs Group, Inc.

    5.500%           Ba1        1,422,330  
  342,100    

Morgan Stanley, (4)

    7.125%           BB+        9,732,745  
  235,300    

Morgan Stanley, (4)

    6.875%           BB+        6,602,518  
  191,400    

Morgan Stanley, (4)

    5.850%           BB+        5,005,110  
  61,000    

Northern Trust Corporation, (4)

    5.850%           BBB+        1,601,860  
  54,750    

State Street Corporation, (4)

    5.350%                 Baa1        1,439,925  
 

Total Capital Markets

                               25,804,488  
      Consumer Finance – 0.8%                           
  185,926    

GMAC Capital Trust I

    5.785%                 B+        4,837,795  

 

  38     NUVEEN


Shares     Description (1)   Coupon              Ratings (2)      Value  
      Food Products – 3.1%                           
  185,400    

CHS Inc., (4)

    7.875%           N/R      $ 5,333,958  
  161,100    

CHS Inc., (4)

    7.100%           N/R        4,356,144  
  141,800    

CHS Inc., (4)

    6.750%           N/R        3,737,848  
  24,000    

Dairy Farmers of America Inc., 144A, (6)

    7.875%           Baa3        2,469,972  
  20,500    

Dairy Farmers of America Inc., 144A, (6)

    7.875%                 Baa3        2,346,291  
 

Total Food Products

                               18,244,213  
      Insurance – 6.2%                           
  324,957    

Aspen Insurance Holdings Limited, (4)

    5.950%           BBB–        8,487,877  
  62,000    

Aspen Insurance Holdings Limited, (4)

    5.625%           BBB–        1,530,780  
  108,900    

Axis Capital Holdings Limited, (4)

    5.500%           BBB        2,636,469  
  61,100    

Delphi Financial Group, Inc., (4), (6)

    1.872%           BB+        1,420,575  
  318,825    

Kemper Corporation

    7.375%           Ba1        8,209,744  
  163,333    

Maiden Holdings NA Limited

    7.750%           N/R        3,594,959  
  62,847    

Reinsurance Group of America Inc., (4)

    6.200%           BBB        1,749,660  
  239,900    

Reinsurance Group of America, Inc., (4)

    5.750%           BBB        6,453,310  
  74,800    

Torchmark Corporation, (4)

    6.125%                 BBB+        1,946,296  
 

Total Insurance

                               36,029,670  
      Mortgage Real Estate Investment Trusts – 0.5%                           
  114,600    

Wells Fargo REIT, (4)

    6.375%                 BBB        2,950,950  
      Oil, Gas & Consumable Fuels – 1.3%                           
  84,700    

Nustar Energy LP, (4)

    8.500%           B1        2,136,134  
  219,800    

Nustar Logistics Limited Partnership, (4)

    8.456%                 B+        5,576,326  
 

Total Oil, Gas & Consumable Fuels

                               7,712,460  
      Thrifts & Mortgage Finance – 2.3%                           
  103,274    

Federal Agricultural Mortgage Corporation, (4)

    6.875%           N/R        2,803,889  
  145,808    

Federal Agricultural Mortgage Corporation, (4)

    6.000%           N/R        3,900,364  
  240,100    

New York Community Bancorp Inc., (4)

    6.375%                 Ba1        6,720,399  
 

Total Thrifts & Mortgage Finance

                               13,424,652  
      U.S. Agency – 4.1%                           
  222,100    

Farm Credit Bank of Texas, 144A, (6)

    6.750%                 Baa1        24,153,375  
 

Total $25 Par (or similar) Retail Preferred (cost $177,900,813)

 

     188,184,455  
Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

CORPORATE BONDS – 0.4% (0.3% of Total Investments)

 

      Insurance – 0.4%                           
$ 1,685    

Security Benefit Life Insurance Company, 144A

    7.450%        10/01/33        BBB      $ 2,042,738  
$ 1,685    

Total Corporate Bonds (cost $1,992,307)

                               2,042,738  
 

Total Long-Term Investments (cost $751,695,036)

                               801,688,636  

 

NUVEEN     39  


JPI    Nuveen Preferred and Income Term Fund   
   Portfolio of Investments (continued)    January 31, 2018 (Unaudited)

 

Principal
Amount (000)
    Description (1)   Coupon      Maturity              Value  
 

SHORT-TERM INVESTMENTS – 0.4% (0.3% of Total Investments)

 

 

REPURCHASE AGREEMENTS – 0.4% (0.3% of Total Investments)

 

$ 2,595    

Repurchase Agreement with Fixed Income Clearing Corporation
dated 1/31/18, repurchase price $2,594,964,
collateralized by $2,690,000 U.S. Treasury Notes,
1.875%, due 3/31/22, value $2,647,051

    0.540%        2/01/18               $ 2,594,925  
 

Total Short-Term Investments (cost $2,594,925)

                               2,594,925  
 

Total Investments (cost $754,289,961) – 137.1%

                               804,283,561  
 

Borrowings – (38.4)% (7), (8)

                               (225,000,000
 

Other Assets Less Liabilities – 1.3% (9)

                               7,393,187  
 

Net Assets Applicable to Common Shares – 100%

                             $ 586,676,748  

Investments in Derivatives

Interest Rate Swaps – OTC Uncleared

 

Counterparty   Notional
Amount
    Fund
Pay/Receive
Floating Rate
    Floating Rate Index     Fixed Rate
(Annualized)
    Fixed Rate
Payment
Frequency
    Effective
Date (10)
    Optional
Termination
Date
    Maturity
Date
    Value     Unrealized
Appreciation
(Depreciation)
 

Morgan Stanley Capital Services, LLC

  $ 112,000,000       Receive       1-Month LIBOR       1.928     Monthly       6/01/18       3/01/23       3/01/24     $ 2,883,388     $ 2,883,388  

Total unrealized appreciation on interest rate swaps

 

                                                          $ 2,883,388  

For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.

 

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted.

 

(2) For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.

 

(3) Perpetual security. Maturity date is not applicable.

 

(4) Investment, or portion of investment, is hypothecated as described in the Notes to Financial Statements, Note 8 – Fund Leverage, Rehypothecation. The total value of investments hypothecated as of the end of the reporting period was $180,742,473.

 

(5) Contingent Capital Securities (“CoCos”) are hybrid securities with loss absorption characteristics built into the terms of the security for the benefit of the issuer. For example, the terms may specify an automatic write-down of principal or a mandatory conversion into the issuer’s common stock under certain adverse circumstances, such as the issuer’s capital ratio falling below a specified level.

 

(6) For fair value measurement disclosure purposes, investment classified as Level 2. See Notes to Financial Statements, Note 2 – Investment Valuation and Fair Value Measurements for more information.

 

(7) The Fund may pledge up to 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives, when applicable) in the Portfolio of Investments as collateral for borrowings. As of the end of the reporting period, investments with a value of $593,509,964 have been pledged as collateral for borrowings.

 

(8) Borrowings as a percentage of Total Investments is 28.0%.

 

(9) Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter (“OTC”) derivatives as presented on the Statement of Assets and Liabilities, when applicable. The unrealized appreciation (depreciation) of OTC-cleared and exchange-traded derivatives is recognized as part of cash collateral at brokers and/or the receivable or payable for variation margin as presented on the Statement of Assets and Liabilities, when applicable.

 

(10) Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each contract.

 

144A Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers.

 

Reg S Regulation S allows U.S. companies to sell securities to persons or entities located outside of the United States without registering those securities with the Securities and Exchange Commission. Specifically, Regulation S provides a safe harbor from the registration requirements of the Securities Act for the offers and sales of securities by both foreign and domestic issuers that are made outside the United States.

 

LIBOR London Inter-Bank Offered Rate

 

REIT Real Estate Investment Trust

 

See accompanying notes to financial statements.

 

  40     NUVEEN


JPS

 

Nuveen Preferred and Income Securities Fund

  

Portfolio of Investments

   January 31, 2018 (Unaudited)

 

Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

LONG-TERM INVESTMENTS – 144.0% (97.7% of Total Investments)

 

 

$1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 69.9% (47.4% of Total Investments)

 

      Automobiles – 0.0%                           
$ 1,000    

General Motors Financial Company Inc.

    5.750%        N/A (3)        BB+      $ 1,032,500  
      Banks – 28.5%                           
  14,300    

Bank of America Corporation

    6.500%        N/A (3)        BBB–        15,998,124  
  12,800    

Bank of America Corporation

    6.300%        N/A (3)        BBB–        14,336,000  
  12,300    

Bank of America Corporation

    6.100%        N/A (3)        BBB–        13,268,625  
  20,394    

Bank of America Corporation, (3-Month LIBOR reference  rate + 3.630% spread), (6)

    8.000%        N/A (3)        BBB–        20,667,891  
  3,600    

Bank One Capital III, (4)

    8.750%        9/01/30        Baa2        5,148,077  
  7,000    

Citigroup Inc.

    6.250%        N/A (3)        BB+        7,612,500  
  43,000    

Citigroup Inc., (4)

    6.125%        N/A (3)        BB+        45,468,200  
  9,250    

Citigroup Inc.

    5.950%        N/A (3)        BB+        9,724,063  
  10,000    

Citigroup Inc.

    8.400%        N/A (3)        BB+        10,175,000  
  24,389    

Citizens Financial Group Inc.

    5.500%        N/A (3)        BB+        25,052,381  
  18,000    

Cobank Agricultural Credit Bank

    6.250%        N/A (3)        BBB+        19,629,882  
  1,250    

Den Norske Bank

    1.750%        N/A (3)        Baa2        1,085,625  
  1,250    

Den Norske Bank

    1.573%        N/A (3)        Baa2        1,085,625  
  17,900    

Dresdner Funding Trust I, Reg S

    8.151%        6/30/31        BB+        24,030,750  
  4,500    

Dresdner Funding Trust, 144A

    8.151%        6/30/31        BB+        6,041,250  
  25,580    

First Union Capital Trust II, Series A, (4), (5)

    7.950%        11/15/29        Baa1        33,427,875  
  30,000    

HSBC Capital Funding LP, Debt, 144A

    10.176%        N/A (3)        BBB+        48,600,000  
  54,000    

JP Morgan Chase & Company

    6.750%        N/A (3)        BBB–        60,345,000  
  10,000    

JP Morgan Chase & Company

    6.100%        N/A (3)        BBB–        10,668,750  
  11,000    

JP Morgan Chase & Company

    6.000%        N/A (3)        BBB–        11,687,500  
  4,900    

JP Morgan Chase & Company

    5.300%        N/A (3)        BBB–        5,048,225  
  3,500    

JP Morgan Chase & Company

    5.150%        N/A (3)        BBB–        3,565,625  
  27,300    

JP Morgan Chase & Company

    7.900%        N/A (3)        BBB–        27,675,374  
  8,000    

KeyCorp Capital III, (5)

    7.750%        7/15/29        Baa2        10,400,000  
  12,000    

Lloyds Bank PLC, 144A, (4)

    12.000%        N/A (3)        BBB–        16,016,244  
  20,900    

Lloyds Bank PLC, Reg S

    12.000%        N/A (3)        BBB–        27,907,373  
  4,800    

Lloyds Banking Group PLC, 144A

    6.413%        N/A (3)        Baa3        5,646,000  
  9,850    

Lloyds Banking Group PLC, 144A

    6.657%        N/A (3)        Baa3        11,721,500  
  9,100    

M&T Bank Corporation, (4)

    6.375%        N/A (3)        Baa1        9,282,000  
  29,100    

PNC Financial Services Inc.

    6.750%        N/A (3)        Baa2        31,755,375  
  25,000    

Standard Chartered PLC, 144A

    7.014%        N/A (3)        Ba1        30,700,000  
  31,278    

Wells Fargo & Company

    7.980%        N/A (3)        Baa2        31,572,013  
  3,000    

Wells Fargo & Company

    5.875%        N/A (3)        Baa2        3,263,100  
 

Total Banks

                               598,605,947  
      Capital Markets – 2.1%                           
  12,100    

Bank of New York Mellon

    4.950%        N/A (3)        Baa1        12,375,275  
  18,700    

Charles Schwab Corporation

    7.000%        N/A (3)        BBB        21,037,500  
  3,500    

Goldman Sachs Group Inc.

    5.700%        N/A (3)        Ba1        3,602,830  
  6,150    

Morgan Stanley

    5.550%        N/A (3)        BB+        6,357,563  
 

Total Capital Markets

                               43,373,168  
      Consumer Finance – 0.4%                           
  8,000    

Capital One Financial Corporation

    5.550%        N/A (3)        Baa3        8,260,000  
      Diversified Financial Services – 2.5%                           
  10,000    

Cooperatieve Rabobank U.A. of Netherlands, Reg S

    11.000%        N/A (3)        Baa2        11,037,500  
  2,861    

Countrywide Capital Trust III, Series B, (5)

    8.050%        6/15/27        BBB–        3,608,722  
  17,557    

Rabobank Nederland, 144A

    11.000%        N/A (3)        Baa2        19,378,539  
  17,705    

Voya Financial Inc., (4), (5)

    5.650%        5/15/53        Baa3        18,811,563  
 

Total Diversified Financial Services

                               52,836,324  

 

NUVEEN     41  


JPS    Nuveen Preferred and Income Securities Fund   
   Portfolio of Investments (continued)    January 31, 2018 (Unaudited)

 

Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Electric Utilities – 3.0%                           
$ 22,600    

Emera, Inc., (4), (5)

    6.750%        6/15/76        BBB–      $ 25,538,000  
  1,000    

FPL Group Capital Inc., (3-Month LIBOR reference rate + 2.068% spread), (4), (6)

    3.762%        10/01/66        BBB        963,750  
  11,450    

FPL Group Capital Inc., (3-Month LIBOR reference rate + 2.125% spread), (5), (6)

    3.738%        6/15/67        BBB        10,964,840  
  1,600    

NextEra Energy Inc., (5)

    4.800%        12/01/77        BBB        1,602,000  
  23,482    

PPL Capital Funding Inc., (3-Month LIBOR reference rate + 2.665% spread), (4), (6)

    1.721%        3/30/67        BBB        23,247,180  
 

Total Electric Utilities

                               62,315,770  
      Energy Equipment & Services – 0.8%                           
  14,530    

Transcanada Trust, (4)

    5.875%        8/15/76        BBB        15,823,170  
      Food Products – 0.2%                           
  4,500    

Dairy Farmers of America Inc., 144A, (4)

    7.125%        N/A (3)        Baa3        4,961,250  
      Industrial Conglomerates – 2.5%                           
  51,061    

General Electric Capital Corporation

    5.000%        N/A (3)        A–        51,571,610  
      Insurance – 22.5%                           
  3,598    

Ace Capital Trust II, (5)

    9.700%        4/01/30        BBB+        5,432,980  
  9,800    

AIG Life Holdings Inc., (4)

    8.500%        7/01/30        Baa2        13,034,000  
  4,400    

Allstate Corporation, (4)

    5.750%        8/15/53        Baa1        4,785,000  
  1,200    

Allstate Corporation, (5)

    6.500%        5/15/57        Baa1        1,452,000  
  13,605    

American International Group, Inc., (4)

    8.175%        5/15/58        Baa2        18,502,800  
  2,299    

AON Corporation, (4)

    8.205%        1/01/27        BBB        2,988,700  
  900    

AXA, Reg S

    5.500%        N/A (3)        A3        916,938  
  16,550    

AXA SA, (4)

    8.600%        12/15/30        A3        23,545,685  
  17,819    

AXA SA, 144A

    6.380%        N/A (3)        Baa1        20,759,135  
  32,854    

Catlin Insurance Company Limited, 144A, (3-Month LIBOR reference rate + 2.975% spread), (6)

    4.719%        N/A (3)        BBB+        32,196,920  
  1,200    

Everest Reinsurance Holdings, Inc., (3-Month LIBOR reference rate + 2.385% spread), (4), (6)

    6.600%        5/15/37        BBB        1,164,000  
  8,100    

Great West Life & Annuity Capital I, 144A, (5)

    6.625%        11/15/34        A–        9,653,302  
  12,250    

Great West Life & Annuity Insurance Capital LP II, 144A,
(3-Month LIBOR reference rate + 2.538% spread), (4), (6)

    7.153%        5/16/46        A–        12,096,875  
  11,688    

Hartford Financial Services Group Inc., (5)

    8.125%        6/15/38        BBB–        11,907,150  
  16,150    

Hartford Financial Services Group, Inc., 144A, (3-Month LIBOR reference rate + 2.125% spread), (4), (6)

    3.547%        2/12/47        BBB–        15,785,010  
  5,500    

Legal & General Group PLC, Reg S

    5.250%        3/21/47        BBB+        5,713,675  
  20,369    

Liberty Mutual Group, 144A, (3-Month LIBOR reference rate + 2.905% spread), (6)

    4.518%        3/15/37        Baa3        20,012,543  
  25,841    

Liberty Mutual Group, 144A, (4)

    7.800%        3/15/37        Baa3        32,688,864  
  3,277    

Lincoln National Corporation, (3-Month LIBOR reference rate + 2.358% spread), (4), (6)

    7.000%        5/17/66        BBB        3,150,016  
  10,390    

Lincoln National Corporation, (3-Month LIBOR reference rate + 2.040% spread), (4), (6)

    6.050%        4/20/67        BBB        9,662,700  
  26,100    

MetLife Capital Trust IV, 144A, (5)

    7.875%        12/15/37        BBB        34,403,063  
  3,000    

MetLife Inc., (4)

    10.750%        8/01/39        BBB        4,980,000  
  36,531    

MetLife Inc., 144A, (5)

    9.250%        4/08/38        BBB        53,654,906  
  41,904    

Nationwide Financial Services Inc., (5)

    6.750%        5/15/37        Baa2        46,932,480  
  6,243    

Oil Insurance Limited, 144A, (3-Month LIBOR reference rate + 2.982% spread), (6)

    4.677%        N/A (3)        Baa1        6,040,103  
  10,750    

Provident Financing Trust I, (4), (5)

    7.405%        3/15/38        Baa3        12,282,950  
  6,225    

Prudential Financial Inc., (4)

    5.875%        9/15/42        BBB+        6,816,375  
  27,180    

Prudential Financial Inc., (4)

    5.625%        6/15/43        BBB+        29,563,685  
  305    

Prudential Financial Inc., (4)

    8.875%        6/15/38        BBB+        311,789  
  1,300    

Prudential PLC, Reg S

    7.750%        N/A (3)        A–        1,328,760  
  5,405    

XL Capital Ltd, (3-Month LIBOR reference rate + 2.458% spread), (6)

    4.179%        N/A (3)        BBB        5,073,944  
  28,700    

XLIT Limited

    3.687%        N/A (3)        BBB–        26,691,000  
 

Total Insurance

                               473,527,348  

 

  42     NUVEEN


Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Machinery – 0.3%                           
$ 6,000    

Stanley Black & Decker Inc., (4)

    5.750%        12/15/53        BBB+      $ 6,180,000  
      Metals & Mining – 0.7%                           
  13,000    

BHP Billiton Finance USA Limited, 144A, (4)

    6.750%        10/19/75        A–        15,138,500  
      Multi-Utilities – 0.1%                           
  3,000    

WEC Energy Group, Inc., (3-Month LIBOR reference rate + 2.113% spread), (4), (6)

    3.528%        5/15/67        Baa1        2,909,010  
      Oil, Gas & Consumable Fuels – 1.7%                           
  3,000    

Enterprise Products Operating LLP, (4)

    5.250%        8/16/77        Baa2        2,992,500  
  32,624    

Enterprise Products Operating LP, (3-Month LIBOR reference rate + 2.680% spread), (4), (5), (6)

    1.748%        1/15/68        Baa2        32,827,900  
 

Total Oil, Gas & Consumable Fuels

                               35,820,400  
      Road & Rail – 1.4%                           
  25,485    

Burlington Northern Santa Fe Funding Trust I, (5)

    6.613%        12/15/55        A–        29,371,463  
      Wireless Telecommunication Services – 3.2%                           
  58,738    

Centaur Funding Corporation, Series B, 144A, (4)

    9.080%        4/21/20        BBB–        67,221,130  
 

Total $1,000 Par (or similar) Institutional Preferred (cost $1,332,563,249)

 

     1,468,947,590  
Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

CONTINGENT CAPITAL SECURITIES – 55.8% (37.8% of Total Investments) (7)

 

      Banks – 41.0%                           
$ 27,800    

Australia and New Zealand Banking Group Limited of the
United Kingdom, 144A

    6.750%        N/A (3)        Baa2      $ 31,309,750  
  47,000    

Banco Bilbao Vizcaya Argentaria S.A, Reg S

    9.000%        N/A (3)        BB        47,650,856  
  22,600    

Banco Santander SA, Reg S

    6.375%        N/A (3)        Ba1        23,098,556  
  26,400    

Barclays Bank PLC

    7.750%        4/10/23        BBB–        26,571,600  
  7,000    

Barclays Bank PLC, (4)

    7.625%        11/21/22        BBB–        7,927,570  
  36,416    

Barclays PLC

    7.434%        N/A (3)        BB+        37,402,509  
  45,290    

Barclays PLC

    8.250%        N/A (3)        BB+        47,160,024  
  50,400    

Credit Agricole SA, 144A

    8.125%        N/A (3)        BBB–        60,339,685  
  19,653    

Credit Agricole SA, 144A

    7.875%        N/A (3)        BBB–        22,318,969  
  6,500    

Credit Agricole SA, Reg S

    8.125%        N/A (3)        BBB–        7,781,904  
  1,000    

Credit Agricole, S.A, 144A

    6.625%        N/A (3)        BBB–        1,035,688  
  17,200    

DNB Bank ASA, Reg S

    6.500%        N/A (3)        BBB        18,368,224  
  11,000    

DNB Bank ASA, Reg S

    5.750%        N/A (3)        BBB        11,316,250  
  4,000    

HSBC Holdings PLC

    6.000%        N/A (3)        BBB        4,185,000  
  66,505    

HSBC Holdings PLC

    6.875%        N/A (3)        BBB        71,409,744  
  16,000    

ING Groep N.V

    6.500%        N/A (3)        BBB–        17,240,000  
  5,000    

ING Groep N.V, Reg S

    6.875%        N/A (3)        BBB–        5,419,020  
  70,529    

Lloyds Banking Group PLC

    7.500%        N/A (3)        BB+        79,609,609  
  12,330    

Nordea Bank AB, Reg S

    5.250%        N/A (3)        BBB        12,580,620  
  35,090    

Nordea Bank AB, 144A

    6.125%        N/A (3)        BBB        37,653,325  
  5,000    

Nordea Bank AB, Reg S

    6.125%        N/A (3)        BBB        5,365,250  
  2,000    

Royal Bank of Scotland Group PLC

    8.625%        N/A (3)        Ba3        2,232,500  
  25,375    

Royal Bank of Scotland Group PLC

    8.000%        N/A (3)        Ba3        29,038,643  
  63,786    

Royal Bank of Scotland Group PLC

    7.500%        N/A (3)        Ba3        67,533,427  
  15,000    

Societe Generale, Reg S

    8.250%        N/A (3)        BB+        15,612,240  
  69,300    

Societe Generale, 144A

    8.000%        N/A (3)        BB+        80,994,375  
  9,000    

Societe Generale, Reg S

    7.875%        N/A (3)        BB+        10,192,500  
  13,000    

Standard Chartered PLC, 144A

    7.750%        N/A (3)        Ba1        14,300,000  
  12,000    

Standard Chartered PLC, 144A

    7.500%        N/A (3)        Ba1        12,930,000  
  4,000    

Standard Chartered PLC, Reg S

    7.500%        N/A (3)        Ba1        4,310,000  
  32,786    

Svenska Handelsbanken AB, Reg S

    5.250%        N/A (3)        BBB+        33,397,459  
  15,000    

Swedbank AB, Reg S

    6.000%        N/A (3)        BBB        15,787,500  
  793,960    

Total Banks

                               862,072,797  

 

NUVEEN     43  


JPS    Nuveen Preferred and Income Securities Fund   
   Portfolio of Investments (continued)    January 31, 2018 (Unaudited)

 

Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Capital Markets – 10.3%                           
$ 51,300    

Credit Suisse Group AG, 144A

    7.500%        N/A (3)        BB      $ 58,353,750  
  8,200    

Credit Suisse Group AG, 144A

    6.250%        N/A (3)        BB        8,845,750  
  22,000    

Credit Suisse Group AG, Reg S

    7.500%        N/A (3)        BB        25,025,000  
  11,000    

Credit Suisse Group AG, Reg S

    6.500%        8/08/23        BBB        12,292,500  
  2,676    

UBS AG Stamford, (4)

    7.625%        8/17/22        A–        3,118,878  
  11,700    

UBS Group AG, Reg S

    6.875%        N/A (3)        BBB–        12,476,880  
  42,178    

UBS Group AG, Reg S

    7.125%        N/A (3)        BBB–        44,424,822  
  5,609    

UBS Group AG, Reg S

    7.000%        N/A (3)        BBB–        6,338,170  
  39,800    

UBS Group AG, Reg S

    6.875%        N/A (3)        BBB–        44,260,665  
  194,463    

Total Capital Markets

                               215,136,415  
      Diversified Financial Services – 4.5%                           
  5,000    

BNP Paribas, Reg S

    7.375%        N/A (3)        BBB–        5,743,750  
  34,185    

BNP Paribas, 144A

    7.375%        N/A (3)        BBB–        39,270,019  
  46,000    

BNP Paribas, 144A

    7.625%        N/A (3)        BBB–        50,197,500  
  85,185    

Total Diversified Financial Services

                               95,211,269  
$ 1,073,608    

Total Contingent Capital Securities (cost $1,087,143,188)

 

     1,172,420,481  
Shares     Description (1)   Coupon              Ratings (2)      Value  
 

$25 PAR (OR SIMILAR) RETAIL PREFERRED – 15.6% (10.6% of Total Investments)

 

     
      Banks – 6.4%                           
  105,300    

AgriBank FCB, (8)

    6.875%           BBB+      $ 11,543,513  
  645,113    

Citigroup Inc.

    6.875%           BB+        18,192,186  
  47,500    

Cobank Agricultural Credit Bank, 144A, (8)

    6.250%           BBB+        5,046,875  
  53,000    

Cobank Agricultural Credit Bank, (8)

    6.200%           BBB+        5,671,000  
  86,000    

Fifth Third Bancorp., (5)

    6.625%           Baa3        2,432,080  
  724,000    

KeyCorp Preferred Stock, (5)

    6.125%           Baa3        20,456,620  
  2,164,700    

PNC Financial Services, (5)

    6.125%           Baa2        59,897,248  
  249,285    

Wells Fargo & Company, (5)

    5.850%           Baa2        6,606,053  
  182,000    

Wells Fargo & Company

    5.625%                 Baa2        4,570,020  
 

Total Banks

                               134,415,595  
      Capital Markets – 1.4%                           
  369,239    

Goldman Sachs Group, Inc.

    5.500%           Ba1        9,618,676  
  38,534    

Morgan Stanley, (5)

    7.125%           BB+        1,096,292  
  640,000    

Morgan Stanley, (5)

    5.850%           BB+        16,736,000  
  74,642    

State Street Corporation, (5)

    5.900%                 Baa1        1,996,674  
 

Total Capital Markets

                               29,447,642  
      Diversified Telecommunication Services – 1.1%                           
  55,291    

Qwest Corporation, (4)

    7.500%           BBB–        1,352,418  
  482,809    

Qwest Corporation

    7.000%           BBB–        10,496,268  
  122,448    

Qwest Corporation, (5)

    7.000%           BBB–        2,654,673  
  128,444    

Qwest Corporation, (5)

    6.875%           BBB–        2,757,693  
  99,763    

Qwest Corporation

    6.625%           BBB–        2,062,101  
  171,974    

Qwest Corporation

    6.125%                 BBB–        3,320,818  
 

Total Diversified Telecommunication Services

                               22,643,971  
      Electric Utilities – 1.1%                           
  160,000    

Alabama Power Company, (5)

    5.000%           A3        4,006,400  
  299,756    

Integrys Energy Group Inc., (4), (5), (8)

    6.000%           Baa1        7,943,534  
  88,577    

Interstate Power and Light Company, (5)

    5.100%           BBB        2,127,620  
  160,407    

SCE Trust V

    5.450%           Baa1        4,043,860  
  130,000    

SCE Trust VI, (5)

    5.000%           Baa1        2,944,500  
  86,891    

Southern Company

    5.250%                 BBB        2,066,268  
 

Total Electric Utilities

                               23,132,182  

 

  44     NUVEEN


Shares     Description (1)   Coupon              Ratings (2)      Value  
      Equity Real Estate Investment Trusts – 0.6%                           
  76,450    

DDR Corporation, (4)

    6.250%           Ba1      $ 1,856,971  
  152,294    

Digital Realty Trust Inc., (4)

    7.375%           Baa3        4,011,424  
  2,100    

Kimco Realty Corporation,.

    5.250%           Baa2        48,762  
  18,639    

Kimco Realty Corporation, (4)

    5.625%           Baa2        443,049  
  300    

Kimco Realty Corporation,

    5.500%           Baa2        7,143  
  82,301    

Prologis Inc., (8)

    8.540%           BBB        5,702,595  
  3,000    

Public Storage, Inc.

    5.625%           A3        75,240  
  1,116    

Public Storage, Inc.

    5.200%           A3        26,371  
  2,705    

Public Storage, Inc.

    5.050%           A3        63,216  
  12,199    

Ventas Realty LP, (4)

    5.450%           BBB+        307,171  
  2,000    

Vornado Realty Trust.

    5.250%                 BBB–        48,380  
 

Total Equity Real Estate Investment Trusts

                               12,590,322  
      Food Products – 0.6%                           
  91,900    

Dairy Farmers of America Inc., 144A, (8)

    7.875%           Baa3        9,457,934  
  32,500    

Dairy Farmers of America Inc., 144A, (8)

    7.875%                 Baa3        3,719,729  
 

Total Food Products

                               13,177,663  
      Insurance – 3.1%                           
  298,680    

Aegon N.V

    6.375%           Baa1        7,634,261  
  608,741    

Allstate Corporation, (4)

    5.100%           Baa1        15,784,653  
  54,297    

American Financial Group, (4)

    6.250%           Baa2        1,432,898  
  33,829    

Arch Capital Group Limited

    5.250%           BBB        788,554  
  84,899    

Aspen Insurance Holdings Limited, (5)

    5.950%           BBB–        2,217,562  
  131,293    

Axis Capital Holdings Limited

    5.500%           BBB        3,244,250  
  307,730    

Hartford Financial Services Group Inc., (4), (5)

    7.875%           BBB–        8,936,479  
  524,885    

Prudential PLC

    6.750%           A–        13,746,737  
  416,100    

Reinsurance Group of America Inc., (4)

    6.200%           BBB        11,584,224  
  10,000    

W.R. Berkley Corporation, (4)

    5.625%                 BBB–        246,000  
 

Total Insurance

                               65,615,618  
      Multi-Utilities – 0.3%                           
  280,000    

DTE Energy Company.

    5.250%                 Baa2        6,776,000  
      U.S. Agency – 0.7%                           
  132,750    

Farm Credit Bank of Texas, 144A, (4), (8)

    6.750%                 Baa1        14,436,563  
      Wireless Telecommunication Services – 0.3%                           
  90,850    

Telephone and Data Systems Inc., (4)

    7.000%           BB+        2,253,080  
  131,990    

Telephone and Data Systems Inc., (4)

    6.875%           BB+        3,279,952  
  11,826    

United States Cellular Corporation, (4)

    7.250%           Ba1        294,822  
  10,591    

United States Cellular Corporation, (4)

    6.950%                 Ba1        258,738  
 

Total Wireless Telecommunication Services

                               6,086,592  
 

Total $25 Par (or similar) Retail Preferred (cost $311,624,124)

 

     328,322,148  
Shares     Description (1), (9)                           Value  
 

INVESTMENT COMPANIES – 1.1% (0.8% of Total Investments)

 

  966,571    

Blackrock Credit Allocation Income Trust IV, (5)

           $ 12,536,426  
  646,421    

John Hancock Preferred Income Fund III, (5)

                               11,402,866  
 

Total Investment Companies (cost $34,130,200)

 

     23,939,292  

 

NUVEEN     45  


JPS    Nuveen Preferred and Income Securities Fund   
   Portfolio of Investments (continued)    January 31, 2018 (Unaudited)

 

Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

CORPORATE BONDS – 0.8% (0.6% of Total Investments)

 

      Insurance – 0.7%                           
$ 5,000    

AIG Life Holdings Inc., 144A, (5)

    8.125%        3/15/46        Baa2      $ 7,075,000  
  6,150    

Liberty Mutual Group Inc., 144A, (4), (5)

    7.697%        10/15/97        BBB+        8,610,148  
  11,150    

Total Insurance

                               15,685,148  
      Wireless Telecommunication Services – 0.1%                           
  1,600    

Koninklijke KPN NV, 144A, (4)

    7.000%        3/28/73        BB+        1,804,000  
$ 12,750    

Total Corporate Bonds (cost $14,938,944)

 

     17,489,148  
Shares     Description (1)   Coupon              Ratings (2)      Value  
 

CONVERTIBLE PREFERRED SECURITIES – 0.8 (0.5% of Total Investments)

 

      Banks – 0.8%                           
  12,700    

Wells Fargo & Company, (5)

    7.500%                 Baa2      $ 16,256,000  
 

Total Convertible Preferred Securities (cost $15,192,422)

                               16,256,000  
 

Total Long-Term Investments (cost $2,795,592,127)

                               3,027,374,659  
Principal
Amount (000)
    Description (1)   Coupon      Maturity              Value  
 

SHORT-TERM INVESTMENTS – 3.3% (2.3% of Total Investments)

 

 

REPURCHASE AGREEMENTS – 3.3% (2.3% of Total Investments)

 

$ 69,723    

Repurchase Agreement with Fixed Income Clearing Corporation, dated 1/31/18, repurchase price $69,724,215,
collateralized by $72,275,000 U.S. Treasury Notes,
1.875%, due 3/31/22, value $71,121,057

    0.540%        2/01/18               $ 69,723,169  
 

Total Short-Term Investments (cost $69,723,169)

                               69,723,169  
 

Total Investments (cost $2,865,315,296) – 147.3%

                               3,097,097,828  
 

Borrowings – (40.2)% (10), (11)

                               (845,300,000
 

Reverse Repurchase Agreements – (9.5)% (12)

                               (200,000,000
 

Other Assets Less Liabilities – 2.4% (13)

                               50,669,165  
 

Net Assets Applicable to Common Shares – 100%

                             $ 2,102,466,993  

Investments in Derivatives

Interest Rate Swaps – OTC Uncleared

 

Counterparty   Notional
Amount
    Fund
Pay/Receive
Floating Rate
    Floating Rate Index     Fixed Rate
(Annualized)
    Fixed Rate
Payment
Frequency
    Effective
Date (14)
    Optional
Termination
Date
    Maturity
Date
    Value     Unrealized
Appreciation
(Depreciation)
 

Morgan Stanley Capital Services, LLC

  $ 521,000,000       Receive       1-Month LIBOR       1.994     Monthly       6/01/18       7/01/25       7/01/27     $ 18,206,126     $ 18,206,126  

Total unrealized appreciation on interest rate swaps

 

                                                          $ 18,206,126  

 

  46     NUVEEN


For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.

 

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted.

 

(2) For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.

 

(3) Perpetual security. Maturity date is not applicable.

 

(4) Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in reverse repurchase agreements. As of the end of the reporting period, investments with a value of $467,076,830 have been pledged as collateral for reverse repurchase agreements.

 

(5) Investment, or portion of investment, is hypothecated as described in the Notes to Financial Statements, Note 8 – Fund Leverage, Rehypothecation. The total value of investments hypothecated as of the end of the reporting period was $471,556,757.

 

(6) Variable rate security. The rate shown is the coupon as of the end of the reporting period.

 

(7) Contingent Capital Securities (“CoCos”) are hybrid securities with loss absorption characteristics built into the terms of the security for the benefit of the issuer. For example, the terms may specify an automatic write-down of principal or a mandatory conversion into the issuer’s common stock under certain adverse circumstances, such as the issuer’s capital ratio falling below a specified level.

 

(8) For fair value measurement disclosure purposes, investment classified as Level 2. See Notes to Financial Statements, Note 2 – Investment Valuation and Fair Value Measurements for more information.

 

(9) A copy of the most recent financial statements for these investment companies can be obtained directly from the Securities and Exchange Commission on its website at http:// www.sec.gov.

 

(10) The Fund may pledge up to 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives, when applicable) in the Portfolio of Investments as collateral for borrowings. As of the end of the reporting period, investments with a value of $1,949,577,351 have been pledged as collateral for borrowings.

 

(11) Borrowings as a percentage of Total Investments are 27.3%.

 

(12) Reverse Repurchase Agreements as a percentage of Total Investments is 6.5%.

 

(13) Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter (“OTC”) derivatives as presented the Statement of Assets and Liabilities, when applicable. The unrealized appreciation (depreciation) of OTC-cleared and exchange-traded derivatives is recognized as part of cash collateral at brokers and/or the receivable or payable for variation margin as presented on the Statement of Assets and Liabilities, when applicable.

 

(14) Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each contract.

 

144A Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers.

 

Reg S Regulation S allows U.S. companies to sell securities to persons or entities located outside of the United States without registering those securities with the Securities and Exchange Commission. Specifically, Regulation S provides a safe harbor from the registration requirements of the Securities Act for the offers and sales of securities by both foreign and domestic issuers that are made outside the United States.

 

LIBOR London Inter-Bank Offered Rate

 

See accompanying notes to financial statements.

 

NUVEEN     47  


JPT

 

Nuveen Preferred and Income 2022 Term Fund

  

Portfolio of Investments

   January 31, 2018 (Unaudited)

 

Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

LONG-TERM INVESTMENTS – 123.3% (99.0% of Total Investments)

 

  
 

$1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 97.5% (78.3% of Total Investments)

 

  
      Automobiles – 2.7%                           
$ 4,385    

General Motors Financial Company Inc.

    5.750%        N/A (3)        BB+      $ 4,527,512  
      Banks – 36.4%                           
  2,730    

Bank of America Corporation

    6.500%        N/A (3)        BBB–        3,054,188  
  2,000    

Bank of America Corporation

    6.300%        N/A (3)        BBB–        2,240,000  
  2,815    

Bank of America Corporation

    6.250%        N/A (3)        BBB–        3,037,104  
  660    

Bank of America Corporation

    8.000%        N/A (3)        BBB–        668,864  
  1,078    

Bank of America Corporation

    8.125%        N/A (3)        BBB–        1,099,560  
  2,000    

Barclays Bank PLC, 144A

    10.180%        6/12/21        A–        2,413,394  
  2,480    

Citigroup Inc.

    6.125%        N/A (3)        BB+        2,622,352  
  1,000    

Citigroup Inc.

    5.950%        N/A (3)        BB+        1,051,250  
  270    

Citigroup Inc.

    5.950%        N/A (3)        BB+        281,813  
  3,005    

Citigroup Inc.

    5.875%        N/A (3)        BB+        3,110,175  
  1,500    

Citizens Financial Group Inc.

    5.500%        N/A (3)        BB+        1,540,800  
  2,000    

Commerzbank AG, 144A

    8.125%        9/19/23        BBB        2,384,895  
  3,000    

JP Morgan Chase & Company

    6.750%        N/A (3)        BBB–        3,352,500  
  4,845    

JP Morgan Chase & Company

    5.300%        N/A (3)        BBB–        4,991,561  
  1,400    

KeyCorp Convertible Preferred Stock

    5.000%        N/A (3)        Baa3        1,424,500  
  6,500    

Lloyds Bank PLC, 144A

    12.000%        N/A (3)        BBB–        8,675,465  
  680    

M&T Bank Corporation

    6.450%        N/A (3)        Baa2        767,550  
  1,500    

M&T Bank Corporation

    5.125%        N/A (3)        Baa2        1,574,625  
  1,500    

PNC Financial Services

    5.000%        N/A (3)        Baa2        1,572,750  
  1,500    

PNC Financial Services Inc.

    6.750%        N/A (3)        Baa2        1,636,875  
  2,500    

Royal Bank of Scotland Group PLC

    7.648%        N/A (3)        Ba2        3,287,500  
  850    

SunTrust Bank Inc.

    5.625%        N/A (3)        Baa3        881,875  
  1,100    

SunTrust Bank Inc.

    5.050%        N/A (3)        Baa3        1,102,750  
  500    

US Bancorp, Convertible Bonds, Floating Rate

    5.125%        N/A (3)        A3        518,750  
  1,500    

Wachovia Capital Trust III

    5.570%        N/A (3)        Baa2        1,507,125  
  1,105    

Wells Fargo & Company

    7.980%        N/A (3)        Baa2        1,115,387  
  2,230    

Wells Fargo & Company

    5.900%        N/A (3)        Baa2        2,361,570  
  3,245    

Wells Fargo & Company

    5.875%        N/A (3)        Baa2        3,529,587  
 

Total Banks

                               61,804,765  
      Capital Markets – 7.8%                           
  1,670    

Bank of New York Mellon

    4.950%        N/A (3)        Baa1        1,707,993  
  4,905    

Goldman Sachs Group Inc.

    5.375%        N/A (3)        Ba1        5,064,412  
  3,250    

Goldman Sachs Group Inc.

    5.300%        N/A (3)        Ba1        3,384,063  
  1,020    

Morgan Stanley

    5.550%        N/A (3)        BB+        1,054,425  
  2,000    

State Street Corporation

    5.250%        N/A (3)        Baa1        2,085,000  
 

Total Capital Markets

                               13,295,893  
      Commercial Services & Supplies – 1.9%                           
  3,000    

AerCap Global Aviation Trust, 144A

    6.500%        6/15/45        BB        3,270,000  
      Consumer Finance – 3.8%                           
  1,000    

American Express Company

    5.200%        N/A (3)        Baa2        1,023,750  
  1,000    

American Express Company

    4.900%        N/A (3)        Baa2        1,015,000  
  3,200    

Capital One Financial Corporation

    5.550%        N/A (3)        Baa3        3,304,000  
  1,075    

Discover Financial Services

    5.500%        N/A (3)        BB–        1,091,797  
 

Total Consumer Finance

                               6,434,547  
      Diversified Financial Services – 5.8%                           
  1,000    

BNP Paribas, 144A

    7.195%        N/A (3)        BBB        1,156,250  

 

  48     NUVEEN


Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Diversified Financial Services (continued)                           
$ 1,000    

Depository Trust & Clearing Corporation, 144A

    4.875%        N/A (3)        A      $ 1,030,000  
  4,000    

Rabobank Nederland, 144A

    11.000%        N/A (3)        Baa2        4,415,000  
  3,000    

Voya Financial Inc.

    5.650%        5/15/53        Baa3        3,187,500  
 

Total Diversified Financial Services

                               9,788,750  
      Electric Utilities – 4.1%                           
  1,270    

Electricite de France, 144A

    5.250%        N/A (3)        BBB        1,304,924  
  5,000    

Emera, Inc.

    6.750%        6/15/76        BBB–        5,650,000  
 

Total Electric Utilities

                               6,954,924  
      Food Products – 5.1%                           
  2,500    

Dairy Farmers of America Inc., 144A

    7.125%        N/A (3)        Baa3        2,756,250  
  755    

Land O Lakes Capital Trust I, 144A

    7.450%        3/15/28        Ba1        856,925  
  3,080    

Land O’ Lakes Incorporated, 144A

    7.250%        N/A (3)        BB        3,426,500  
  1,450    

Land O’ Lakes Incorporated, 144A

    8.000%        N/A (3)        BB        1,645,750  
 

Total Food Products

                               8,685,425  
      Industrial Conglomerates – 3.7%                           
  6,262    

General Electric Capital Corporation

    5.000%        N/A (3)        A–        6,324,620  
      Insurance – 19.5%                           
  4,000    

AXA SA

    8.600%        12/15/30        A3        5,690,800  
  9,000    

Financial Security Assurance Holdings, 144A

    6.400%        12/15/66        BBB+        8,955,000  
  1,000    

La Mondiale SAM, Reg S

    7.625%        N/A (3)        BBB        1,050,790  
  4,000    

MetLife Inc.

    5.250%        N/A (3)        BBB        4,110,400  
  1,000    

MetLife Inc., 144A

    9.250%        4/08/38        BBB        1,468,750  
  1,000    

Prudential Financial Inc.

    5.875%        9/15/42        BBB+        1,095,000  
  4,000    

Prudential Financial Inc.

    8.875%        6/15/38        BBB+        4,089,040  
  818    

QBE Insurance Group Limited, Reg S

    6.750%        12/02/44        BBB        920,659  
  5,000    

QBE Insurance Group Limited, 144A

    7.500%        11/24/43        Baa2        5,756,250  
 

Total Insurance

                               33,136,689  
      Metals & Mining – 2.7%                           
  1,250    

BHP Billiton Finance USA Limited, 144A

    6.750%        10/19/75        A–        1,455,624  
  3,000    

BHP Billiton Finance USA Limited, 144A

    6.250%        10/19/75        A–        3,221,250  
 

Total Metals & Mining

                               4,676,874  
      Oil, Gas & Consumable Fuels – 0.5%                           
  865    

Enterprise Products Operating LLP

    5.250%        8/16/77        Baa2        862,838  
      U.S. Agency – 3.5%                           
  5,000    

Farm Credit Bank of Texas, 144A

    10.000%        N/A (3)        Baa1        5,875,000  
 

Total $1,000 Par (or similar) Institutional Preferred (cost $162,822,706)

 

     165,637,837  
Shares     Description (1)   Coupon              Ratings (2)      Value  
 

$25 PAR (OR SIMILAR) RETAIL PREFERRED – 25.8% (20.7% of Total Investments)

 

      Banks – 5.2%                           
  2,500    

AgriBank FCB, (4)

    6.875%           BBB+      $ 274,063  
  60,000    

Citigroup Inc.

    7.125%           BB+        1,694,400  
  5,826    

Cobank Agricultural Credit Bank, (4)

    6.200%           BBB+        623,382  
  50,000    

Fifth Third Bancorp.

    6.625%           Baa3        1,414,000  
  75,000    

Huntington BancShares Inc.

    6.250%           Baa3        2,004,000  
  100,000    

Regions Financial Corporation

    6.375%                 BB+        2,749,000  
 

Total Banks

                               8,758,845  
      Capital Markets – 5.5%                           
  50,000    

Morgan Stanley

    7.125%           BB+        1,422,500  

 

NUVEEN     49  


JPT    Nuveen Preferred and Income 2022 Term Fund   
   Portfolio of Investments (continued)    January 31, 2018 (Unaudited)

 

Shares     Description (1)   Coupon              Ratings (2)      Value  
      Capital Markets (continued)                           
  175,000    

Morgan Stanley

    6.875%           BB+      $ 4,910,500  
  69,700    

Morgan Stanley

    5.850%           BB+        1,822,655  
  42,821    

State Street Corporation

    5.350%                 Baa1        1,126,192  
 

Total Capital Markets

                               9,281,847  
      Food Products – 3.8%                           
  46,859    

CHS Inc.

    7.875%           N/R        1,348,133  
  81,867    

CHS Inc.

    7.500%           N/R        2,248,067  
  75,000    

CHS Inc.

    7.100%           N/R        2,028,000  
  31,132    

CHS Inc.

    6.750%                 N/R        820,640  
 

Total Food Products

                               6,444,840  
      Insurance – 6.4%                           
  73,215    

Aspen Insurance Holdings Limited

    5.950%           BBB–        1,912,376  
  74,900    

Aspen Insurance Holdings Limited

    5.625%           BBB–        1,849,281  
  78,986    

Delphi Financial Group, Inc., (4)

    1.872%           BB+        1,836,425  
  49,995    

Hartford Financial Services Group Inc.

    7.875%           BBB–        1,451,855  
  60,000    

Maiden Holdings NA Limited

    7.750%           N/R        1,320,600  
  53,716    

Reinsurance Group of America Inc.

    6.200%           BBB        1,495,453  
  35,002    

Reinsurance Group of America, Inc.

    5.750%                 BBB        941,554  
 

Total Insurance

                               10,807,544  
      Mortgage Real Estate Investment Trusts – 0.3%                           
  20,787    

Wells Fargo REIT

    6.375%                 BBB        535,265  
      Oil, Gas & Consumable Fuels – 2.0%                           
  80,000    

Nustar Energy LP

    8.500%           B1        2,017,600  
  50,000    

Nustar Energy LP

    7.625%           B1        1,181,500  
  9,796    

Nustar Logistics Limited Partnership

    8.456%                 B+        248,525  
 

Total Oil, Gas & Consumable Fuels

                               3,447,625  
      Thrifts & Mortgage Finance – 2.0%                           
  6,255    

Federal Agricultural Mortgage Corporation

    6.875%           N/R        169,823  
  15,135    

Federal Agricultural Mortgage Corporation

    6.000%           N/R        404,861  
  103,800    

New York Community Bancorp Inc.

    6.375%                 Ba1        2,905,362  
 

Total Thrifts & Mortgage Finance

                               3,480,046  
      U.S. Agency – 0.6%                           
  10,000    

Farm Credit Bank of Texas, 144A, (4)

    6.750%                 Baa1        1,087,500  
 

Total $25 Par (or similar) Retail Preferred (cost $44,057,313)

                               43,843,512  
 

Total Long-Term Investments (cost $206,880,019)

                               209,481,349  
Principal
Amount (000)
    Description (1)   Coupon      Maturity              Value  
 

SHORT-TERM INVESTMENTS – 1.2% (1.0% of Total Investments)

 

 

REPURCHASE AGREEMENTS – 1.2% (1.0% of Total Investments)

 

$ 2,080    

Repurchase Agreement with Fixed Income Clearing Corporation,
dated 1/31/18, repurchase price $2,079,599,
collateralized by $2,160,000 U.S. Treasury Notes,
1.875%, due 3/31/22, value $2,125,513

    0.540%        2/01/18               $ 2,079,568  
 

Total Short-Term Investments (cost $2,079,568)

                               2,079,568  
 

Total Investments (cost $208,959,587) – 124.5%

                               211,560,917  
 

Borrowings – (25.0)% (5), (6)

                               (42,500,000
 

Other Assets Less Liabilities – 0.5% (7)

                               897,183  
 

Net Assets Applicable to Common Shares – 100%

                             $ 169,958,100  

 

  50     NUVEEN


Investments in Derivatives

Futures Contracts

 

Description    Contract
Position
     Number of
Contracts
     Expiration
Date
     Notional
Amount
     Value      Unrealized
Appreciation
(Depreciation)
     Variation
Margin
Receivable/
(Payable)
 

U.S. Treasury 5-Year Note

     Short        (25      3/18      $ (2,911,073    $ (2,867,773    $ 43,299      $ 3,125  

Total receivable for variation margin on futures contracts

 

                                       $ 3,125  

 

For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.

 

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted.

 

(2) For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.

 

(3) Perpetual security. Maturity date is not applicable.

 

(4) For fair value measurement disclosure purposes, investment classified as Level 2. See Notes to Financial Statements, Note 2 – Investment Valuation and Fair Value Measurements for more information.

 

(5) Borrowings as a percentage of Total Investments are 20.1%.

 

(6) The Fund may pledge up to 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives, when applicable) in the Portfolio of Investments as collateral for borrowings.

 

(7) Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter (“OTC”) derivatives as presented the Statement of Assets and Liabilities, when applicable. The unrealized appreciation (depreciation) of OTC-cleared and exchange-traded derivatives is recognized as part of cash collateral at brokers and/or the receivable or payable for variation margin as presented on the Statement of Assets and Liabilities, when applicable.

 

144A Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers.

 

Reg S Regulation S allows U.S. companies to sell securities to persons or entities located outside of the United States without registering those securities with the Securities and Exchange Commission. Specifically, Regulation S provides a safe harbor from the registration requirements of the Securities Act for the offers and sales of securities by both foreign and domestic issuers that are made outside the United States.

 

REIT Real Estate Investment Trust.

 

See accompanying notes to financial statements.

 

NUVEEN     51  


Statement of

Assets and Liabilities

   January 31, 2018 (Unaudited)

 

      JPC     JPI     JPS     JPT  

Assets

        

Long-term investments, at value (cost $1,551,114,856, $751,695,036, $2,795,592,127 and $206,880,019, respectively)

   $ 1,626,969,796     $ 801,688,636     $ 3,027,374,659     $ 209,481,349  

Short-term investments, at value (cost approximates value)

     21,717,039       2,594,925       69,723,169       2,079,568  

Cash

     50,998       3,177,281       5,583,334       1,486,407  

Cash collateral at broker for investments in futures contracts(1)

                       14,000  

Unrealized appreciation on interest rate swaps

     9,697,121       2,883,388       18,206,126        

Receivable for:

        

Dividends

     306,407       30,222       1,213,815        

Interest

     16,855,198       8,466,751       40,363,485       1,990,551  

Investments sold

     124,822             6,597,265        

Reclaims

     82,133                    

Variation margin on futures contracts

                       3,125  

Other assets

     263,910       46,697       510,791       1,046  

Total assets

     1,676,067,424       818,887,900       3,169,572,644       215,056,046  

Liabilities

        

Borrowings

     437,000,000       225,000,000       845,300,000       42,500,000  

Reverse repurchase agreements

     125,000,000             200,000,000        

Payable for:

        

Dividends

     6,607,064       3,185,794       12,513,215       828,736  

Investments purchased

     4,364,132       3,177,281       5,838,249       1,486,406  

Accrued expenses:

        

Interest

     74,726       30,238       134,507       42,214  

Management fees

     1,147,666       588,176       2,140,629       155,989  

Trustees fees

     272,489       48,649       527,115       1,894  

Other

     373,297       181,014       651,936       82,707  

Total liabilities

     574,839,374       232,211,152       1,067,105,651       45,097,946  

Net assets applicable to common shares

   $ 1,101,228,050     $ 586,676,748     $ 2,102,466,993     $ 169,958,100  

Common shares outstanding

     103,332,549       22,757,308       203,817,868       6,828,441  

Net asset value (“NAV”) per common share outstanding

   $ 10.66     $ 25.78     $ 10.32     $ 24.89  

Net assets applicable to common shares consist of:

                                

Common shares, $0.01 par value per share

   $ 1,033,325     $ 227,573     $ 2,038,179     $ 68,284  

Paid-in surplus

     1,048,411,305       540,280,742       2,198,860,599       167,762,028  

Undistributed (Over-distribution of) net investment income

     (6,520,924     (2,662,340     (2,417,773     290,567  

Accumulated net realized gain (loss)

     (27,246,323     (4,046,215     (346,002,670     (807,408

Net unrealized appreciation (depreciation)

     85,550,667       52,876,988       249,988,658       2,644,629  

Net assets applicable to common shares

   $ 1,101,228,050     $ 586,676,748     $ 2,102,466,993     $ 169,958,100  

Authorized shares:

        

Common

     Unlimited       Unlimited       Unlimited       Unlimited  

Preferred

     Unlimited       Unlimited       Unlimited       Unlimited  
(1) Cash pledged to collateralize the net payment obligations for investments in derivatives.

 

See accompanying notes to financial statements.

 

  52     NUVEEN


Statement of

Operations

   Six Months Ended January 31, 2018 (Unaudited)

 

      JPC     JPI     JPS     JPT  

Investment Income

        

Dividends

   $ 22,223,168     $ 7,340,809     $ 15,661,864     $ 1,671,775  

Interest

     33,563,077       17,874,565       80,792,286       4,779,739  

Other

     106,117       46,844       122,241        

Total investment income

     55,892,362       25,262,218       96,576,391       6,451,514  

Expenses

        

Management fees

     6,826,565       3,489,559       12,713,349       933,083  

Interest expense

     6,283,479       2,520,094       11,177,249       460,534  

Custodian fees

     90,769       43,807       154,217       17,814  

Trustees fees

     28,054       13,468       51,989       3,396  

Professional fees

     54,581       24,817       56,811       23,877  

Shareholder reporting expenses

     113,337       39,027       224,525       14,679  

Shareholder servicing agent fees

     953       51       2,379       10  

Stock exchange listing fees

     15,184       3,516       30,559        

Investor relations expenses

     63,114       27,969       101,760       10,030  

Other

     118,937       19,868       25,730       7,558  

Total expenses

     13,594,973       6,182,176       24,538,568       1,470,981  

Net investment income (loss)

     42,297,389       19,080,042       72,037,823       4,980,533  

Realized and Unrealized Gain (Loss)

        

Net realized gain (loss) from:

        

Investments and foreign currency

     (2,717,042     1,577,853       10,609,993       (360,492

Futures contracts

                       22,100  

Swaps

     (1,433,628     (1,831,550     (2,855,167      

Change in net unrealized appreciation (depreciation) of:

        

Investments and foreign currency

     (31,203,757     (9,354,290     (42,592,297     (4,439,937

Futures contracts

                       62,379  

Swaps

     11,833,987       5,507,342       22,430,428        

Net realized and unrealized gain (loss)

     (23,520,440     (4,100,645     (12,407,043     (4,715,950

Net increase (decrease) in net assets applicable to common shares from operations

   $ 18,776,949     $ 14,979,397     $ 59,630,780     $ 264,583  

 

See accompanying notes to financial statements.

 

NUVEEN     53  


Statement of

Changes in Net Assets

  

(Unaudited)

 

    JPC     JPI  
    

Six Months

Ended

1/31/18

   

Year
Ended
7/31/17

   

Six Months

Ended

1/31/18

   

Year
Ended
7/31/17

 

Operations

       

Net investment income (loss)

  $ 42,297,389     $ 70,018,749     $ 19,080,042     $ 39,802,785  

Net realized gain (loss) from:

       

Investments and foreign currency

    (2,717,042     14,416,303       1,577,853       4,278,233  

Futures contracts

                       

Options written

          (209,996            

Swaps

    (1,433,628     (3,792,884     (1,831,550     (4,309,652

Change in net unrealized appreciation (depreciation) of:

       

Investments and foreign currency

    (31,203,757     19,055,702       (9,354,290     24,073,726  

Futures contracts

                       

Options written

          (7,871            

Swaps

    11,833,987       10,000,912       5,507,342       9,159,385  

Net increase (decrease) in net assets applicable to common shares from operations

    18,776,949       109,480,915       14,979,397       73,004,477  

Distributions to Common Shareholders

       

From net investment income

    (40,299,694     (75,131,263     (19,320,954     (40,143,229

Return of capital

          (1,478,980           (1,638,466

Decrease in net assets applicable to common shares from distributions to common shareholders

    (40,299,694     (76,610,243     (19,320,954     (41,781,695

Capital Share Transactions

       

Common shares:

       

Issued in the reorganizations

          69,163,446              

Proceeds from sale of shares, net of offering costs

                       

Net proceeds from shares issued to shareholders due to reinvestment of distributions

                      73,445  

Net increase (decrease) in net assets applicable to common shares from capital share transactions

          69,163,446             73,445  

Net increase (decrease) in net assets applicable to common shares

    (21,522,745     102,034,118       (4,341,557     31,296,227  

Net assets applicable to common shares at the beginning of period

    1,122,750,795       1,020,716,677       591,018,305       559,722,078  

Net assets applicable to common shares at the end of period

  $ 1,101,228,050     $ 1,122,750,795     $ 586,676,748     $ 591,018,305  

Undistributed (Over-distribution of) net investment income at the end of period

  $ (6,520,924   $ (8,518,619   $ (2,662,340   $ (2,421,428

 

See accompanying notes to financial statements.

 

  54     NUVEEN


     JPS        JPT  
     

Six Months

Ended

1/31/18

      

Year
Ended
7/31/17

      

Six Months

Ended

1/31/18

      

Year
Ended*

7/31/17

 

Operations

                 

Net investment income (loss)

   $ 72,037,823        $ 143,775,734        $ 4,980,533        $ 4,962,564  

Net realized gain (loss) from:

                 

Investments and foreign currency

     10,609,993          6,326,326          (360,492        (116,773

Futures contracts

                       22,100          (434,242

Options written

                                 

Swaps

     (2,855,167        (7,551,821                  

Change in net unrealized appreciation (depreciation) of:

                 

Investments and foreign currency

     (42,592,297        136,866,006          (4,439,937        7,041,267  

Futures contracts

                       62,379          (19,080

Options written

                                 

Swaps

     22,430,428          19,942,616                    

Net increase (decrease) in net assets applicable to common shares from operations

     59,630,780          299,358,861          264,583          11,433,736  

Distributions to Common Shareholders

                 

From net investment income

     (75,818,928        (151,632,579        (5,221,265        (4,349,266

Return of capital

                                 

Decrease in net assets applicable to common shares from distributions to common shareholders

     (75,818,928        (151,632,579        (5,221,265        (4,349,266

Capital Share Transactions

                 

Common shares:

                 

Issued in the reorganizations

                                 

Proceeds from sale of shares, net of offering costs

                                167,508,239  

Net proceeds from shares issued to shareholders due to reinvestment of distributions

     109,881                   123,729          98,071  

Net increase (decrease) in net assets applicable to common shares from capital share transactions

     109,881                   123,729          167,606,310  

Net increase (decrease) in net assets applicable to common shares

     (16,078,267        147,726,282          (4,832,953        174,690,780  

Net assets applicable to common shares at the beginning of period

     2,118,545,260          1,970,818,978          174,791,053          100,273  

Net assets applicable to common shares at the end of period

   $ 2,102,466,993        $ 2,118,545,260        $ 169,958,100        $ 174,791,053  

Undistributed (Over-distribution of) net investment income at the end of period

   $ (2,417,773      $ 1,363,332        $ 290,567        $ 531,299  
* For the period ended January 26, 2017 (commencement of operations) through July 31, 2017.

 

See accompanying notes to financial statements.

 

NUVEEN     55  


Statement of

Cash Flows

   Six Months Ended January 31, 2018 (Unaudited)

 

      JPC     JPI     JPS     JPT  

Cash Flows from Operating Activities:

        

Net Increase (Decrease) In Net Assets Applicable to Common Shares from Operations

   $ 18,776,949     $ 14,979,397     $ 59,630,780     $ 264,583  

Adjustments to reconcile the net increase (decrease) in net assets applicable to common shares from operations to net cash provided by (used in) operating activities:

        

Purchases of investments

     (245,158,431     (91,089,453     (91,171,266     (28,524,235

Proceeds from sales and maturities of investments

     214,558,118       90,200,014       157,089,915       28,935,394  

Proceeds from (Purchases of) short-term investments, net

     16,864,547       (2,594,925     (54,823,167     (804,011

Premiums received (paid) for interest rate swaps

     1,605,108       1,646,888       3,195,850        

Proceeds from litigation settlement

     43,383             11,078        

Amortization (Accretion) of premiums and discounts, net

     737,482       160,764       788,813       161,992  

(Increase) Decrease in:

        

Cash collateral at brokers for investments in futures contracts

           570,000             186,046  

Receivable for dividends

     240,633       59,301       (113,183     3,095  

Receivable for interest

     (1,665,607     (695,097     (2,363,269     82,268  

Receivable for investments sold

     599,595       7,534,017       (6,461,384      

Receivable for reclaims

     (1,043           1,920        

Receivable for variation margin on futures contracts

                       (35,944

Other assets

     (20,914     (4,461     (35,940     23,019  

Increase (Decrease) in:

        

Payable for investments purchased

     (16,954,764     698,979       5,838,249       1,486,406  

Accrued interest

     (50,014     (21,665     (91,128     (8,086

Accrued management fees

     43,644       785       (87     (2,305

Accrued Trustees fees

     30,040       4,520       56,248       (4,334

Accrued other expenses

     106,880       44,182       184,603       (13,181

Net realized (gain) loss from investments and foreign currency

     2,717,042       (1,577,853     (10,609,993     360,492  

Change in net unrealized (appreciation) depreciation of:

        

Investments and foreign currency

     31,203,757       9,354,290       42,592,297       4,439,937  

Swaps

     (11,833,987     (5,507,342     (22,430,428      

Net cash provided by (used in) operating activities

     11,842,418       23,762,341       81,289,908       6,551,136  

Cash Flows from Financing Activities

        

Increase (Decrease) in cash overdraft

           (1,261,304           26,255  

Net proceeds from reverse repurchase agreements

     125,000,000                    

Repayment of borrowings

     (103,000,000                  

Cash distributions paid to common shareholders

     (40,310,399     (19,323,756     (75,706,574     (5,090,984

Net cash provided by (used in) financing activities

     (18,310,399     (20,585,060     (75,706,574     (5,064,729

Net Increase (Decrease) in Cash

     (6,467,981     3,177,281       5,583,334       1,486,407  

Cash at the beginning of period

     6,518,979                    

Cash at the end of period

   $ 50,998     $ 3,177,281     $ 5,583,334     $ 1,486,407  
Supplemental Disclosure of Cash Flow Information                             

Cash paid for interest (excluding borrowing costs)

   $ 4,992,092     $ 2,541,759     $ 9,126,805     $ 444,241  

Non-cash financing activities not included herein consists of reinvestments of common share distributions

                 109,881       123,729  

 

See accompanying notes to financial statements.

 

  56     NUVEEN


THIS PAGE INTENTIONALLY LEFT BLANK

 

NUVEEN     57  


Financial

Highlights (Unaudited)

 

Selected data for a common share outstanding throughout each period:

 

              
    
    
Investment Operations
    Less Distributions to
Common Shareholders
    Common Share  
     Beginning
Common
Share
NAV
    Net
Investment
Income
(Loss)(a)
    Net
Realized/
Unrealized
Gain (Loss)
    Total     From
Net
Investment
Income
    From
Accumulated
Net
Realized
Gains
    Return
of
Capital
    Total     Discount
per
Share
Repurchased
and Retired
    Ending
NAV
    Ending
Share
Price
 

JPC

 

                                               

Year Ended 7/31:

 

                 

2018(g)

  $ 10.87     $ 0.41     $ (0.23   $ 0.18     $ (0.39   $     $     $ (0.39   $     $ 10.66     $ 9.81  

2017

    10.53       0.72       0.40       1.12       (0.77       —       (0.01     (0.78       —       10.87       10.59  

2016

    10.45       0.77       0.11       0.88       (0.80                 (0.80           10.53       10.43  

2015

    10.67       0.80       (0.25     0.55       (0.77                 (0.77         10.45       9.19  

2014

    10.26       0.79       0.38       1.17       (0.76                 (0.76         10.67       9.34  

2013(e)

    10.28       0.46       (0.04     0.42       (0.44                 (0.44           10.26       9.35  

Year Ended 12/31:

 

                 

2012

    8.67       0.76       1.61       2.37       (0.76                 (0.76           10.28       9.71  

JPI

 

Year Ended 7/31:

 

2018(g)

    25.97       0.84       (0.18     0.66       (0.85                 (0.85           25.78       23.88  

2017

    24.60       1.75       1.46       3.21       (1.77           (0.07     (1.84           25.97       25.15  

2016

    24.88       1.86       (0.01     1.85       (1.95     (0.18           (2.13           24.60       24.59  

2015

    25.51       1.96       (0.65     1.31       (1.94                 (1.94           24.88       22.28  

2014

    25.06       1.98       0.93       2.91       (1.97     (0.49           (2.46           25.51       23.11  

2013

    23.81       1.89       1.32       3.21       (1.86     (0.10           (1.96         25.06       23.68  

 

    Borrowings at the End of Period  
     Aggregate
Amount
Outstanding
(000)
       Asset
Coverage
Per $1,000
 

JPC

                  

Year Ended 7/31:

 

2018(g)

  $ 437,000        $ 3,520  

2017

    540,000          3,079  

2016

    404,100          3,526  

2015

    404,100          3,506  

2014

    402,500          3,572  

2013(e)

    402,500          3,473  

Year Ended 12/31:

 

2012

    383,750          3,599  

JPI

                  

Year Ended 7/31:

 

2018(g)

    225,000          3,607  

2017

    225,000          3,627  

2016

    225,000          3,488  

2015

    225,000          3,516  

2014

    225,000          3,580  

2013

    225,000          3,535  

 

(a) Per share Net Investment Income (Loss) is calculated using the average daily shares method.
(b) Total Return Based on Common Share NAV is the combination of changes in common share NAV, reinvested dividend income at NAV and reinvested capital gains distributions at NAV, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending NAV. The actual reinvest price for the last dividend declared in the period may often be based on the Fund’s market price (and not its NAV), and therefore may be different from the price used in the calculation. Total returns are not annualized.
   Total Return Based on Common Share Price is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized.

 

  58     NUVEEN


            Common Share Supplemental Data/
Ratios Applicable to Common Shares
 
Common Share
Total Returns
          Ratios to Average Net Asset(c)        
Based
on
NAV(b)
        
Based
on
Share
Price(b)
    Ending
Net Assets
(000)
    Expenses     Net
Investment
Income (Loss)
    Portfolio
Turnover
Rate(d)
 
                                             
         
  1.68     (3.82 )%    $ 1,101,228       2.43 %**      7.55 %**      9
  11.16       9.73       1,122,751       1.92       6.82       32  
  9.01       23.47       1,020,717       1.73       7.58       17  
  5.36       6.76       1,012,766       1.63       7.55       44  
  11.97       8.50       1,035,146       1.67       7.73       41  
  4.09       0.63       995,460       1.67 **      7.47 **      27  
         
  28.17       31.44       997,484       1.79       7.85       123  
                                             
         
  2.56       (1.75     586,677       2.08 **      6.42 **      11  
  13.62       10.29       591,018       1.93       7.04       19  
  7.96       20.97       559,722       1.77       7.73       23  
  5.30       4.83       566,137       1.66       7.80       26  
  12.34       8.71       580,516       1.73       7.96       37  
  13.69       0.41       570,298       1.72       7.51       57  

 

(c)     • Net Investment Income (Loss) ratios reflect income earned and expenses incurred on assets attributable to borrowings and/or reverse repurchase agreements (as described in Note 8 – Fund Leverage).
  Each ratio includes the effect of all interest expense paid and other costs related to borrowings and/or reverse repurchase agreements, where applicable, as follows:

 

JPC  

Ratios of Interest Expense
to Average Net Assets
Applicable to Common Shares

 

Year Ended 7/31:

 

2018(g)

    1.12 %** 

2017

    0.70  

2016

    0.50  

2015

    0.41  

2014

    0.43  

2013(e)

    0.45 ** 

Year Ended 12/31:

 

2012

    0.52  

JPI

       

Year Ended 7/31:

 

2018(g)

    0.85 ** 

2017

    0.67  

2016

    0.50  

2015

    0.41  

2014

    0.45  

2013(f)

    0.48 ** 

 

(d) Portfolio Turnover Rate is calculated based on the lesser of long-term purchases or sales (as disclosed in Note 5 – Investment Transactions) divided by the average long-term market value during the period.
(e) For the seven months ended July 31, 2013.
(f) For the period August 29, 2012 (first utilization date of borrowings) through July 31, 2013.
(g) For the six months ended January 31, 2018.
* Rounds to less than $0.01 per share.
** Annualized.

 

See accompanying notes to financial statements.

 

NUVEEN     59  


Financial Highlights (Unaudited) (continued)

 

Selected data for a common share outstanding throughout each period:

 

       Investment Operations     Less Distributions to
Common Shareholders
    Common Share  
     Beginning
Common
Share
NAV
     Net
Investment
Income
(Loss)(a)
     Net
Realized/
Unrealized
Gain (Loss)
     Total     From
Net
Investment
Income
     From
Accumulated
Net Realized
Gains
     Return
of
Capital
     Total    

Discount

per Share
Repurchased
and Retired

     Offering
Costs
     Ending
NAV
     Ending
Share
Price
 

JPS

 

Year Ended 7/31:

 

2018(h)

  $ 10.39      $ 0.35      $ (0.05    $ 0.30     $ (0.37    $      $      $ (0.37   $      $      $ 10.32      $ 9.44  

2017

    9.67        0.71        0.75        1.46       (0.74        —          —        (0.74       —               10.39        10.30  

2016

    9.75        0.69        (0.07      0.62       (0.70                    (0.70                   9.67        9.63  

2015

    9.95        0.68        (0.15      0.53       (0.73                    (0.73                   9.75        9.08  

2014

    9.45        0.69        0.47        1.16       (0.66                    (0.66                   9.95        8.92  

2013

    9.12        0.69        0.30        0.99       (0.66                    (0.66                   9.45        8.47  

JPT

                                                                                                        

Year Ended 7/31:

 

2018(h)

    25.62        0.73        (0.69      0.04       (0.77                    (0.77                   24.89        23.58  

2017(e)

    24.63        0.74        0.94        1.68       (0.64                    (0.64            (0.05      25.62        25.24  

 

    Borrowings at End of Period  
     Aggregate
Amount
Outstanding
(000)
       Asset
Coverage
Per $1,000
 

JPS

                  

Year Ended 7/31:

      

2018(h)

  $ 845,300        $ 3,487  

2017

    845,300          3,506  

2016

    945,000          3,086  

2015

    465,800          3,521  

2014

    464,000          3,581  

2013

    464,000          3,451  

JPT

                  

Year Ended 7/31:

      

2018(h)

    42,500          4,999  

2017(e)

    42,500          5,113  

 

(a) Per share Net Investment Income (Loss) is calculated using the average daily shares method.
(b) Total Return Based on Common Share NAV is the combination of changes in common share NAV, reinvested dividend income at NAV and reinvested capital gains distributions at NAV, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending NAV. The actual reinvest price for the last dividend declared in the period may often be based on the Fund’s market price (and not its NAV), and therefore may be different from the price used in the calculation. Total returns are not annualized.
   Total Return Based on Common Share Price is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized.

 

  60     NUVEEN


            Common Share Supplemental Data/
Ratios Applicable to Common Shares
 
Common Share
Total Returns
          Ratios to Average Net Assets
Before Reimbursement(c)
    Ratios to Average Net Assets
After Reimbursement(c)(d)
       
Based
on
NAV(b)
    Based
on
Share
Price(b)
    Ending
Net Assets
(000)
    Expenses     Net
Investment
Income (Loss)
    Expenses     Net
Investment
Income (Loss)
    Portfolio
Turnover
Rate(f)
 
                                                             
             
  2.94     (4.93 )%    $ 2,102,467       2.31 %*      6.77 %*      N/A       N/A       3
  15.83       15.50       2,118,545       2.03       7.18       N/A       N/A       13  
  6.77       14.48       1,970,819       1.84       7.31       N/A       N/A       36  
  5.47       10.35       1,174,259       1.64       6.92       1.64 (g)      6.92 (g)      8  
  12.83       13.76       1,197,726       1.69       7.32       N/A       N/A       16  
  10.98       (2.63     1,137,303       1.71       7.23       N/A       N/A       32  
                                                             
             
  0.13       (3.68     169,958       1.69     5.72     N/A       N/A       14  
  6.69       3.54       174,791       1.61     5.73     N/A       N/A       22  

 

(c)     • Net Investment Income (Loss) ratios reflect income earned and expenses incurred on assets attributable to borrowings and/or reverse repurchase agreements (as described in Note 8 – Fund Leverage), where applicable.
  Each ratio includes the effect of all interest expense paid and other costs related to borrowings and/or reverse repurchase agreements, where applicable, as follows:

 

JPS   Ratios of Interest Expense
to Average Net Assets
Applicable to Common Shares
 

Year Ended 7/31:

 

2018(h)

    1.05 %* 

2017

    0.77  

2016

    0.50  

2015

    0.40  

2014

    0.43  

2013

    0.47  

JPT

       

Year Ended 7/31:

 

2018(h)

    0.53

2017(e)

    0.42

 

(d) After expense reimbursement from the Adviser, where applicable.
(e) For the period January 26, 2017 (commencement of operations) through July 31, 2017.
(f) Portfolio Turnover Rate is calculated based on the lesser of long-term purchases or sales (as disclosed in Note 5 – Investment Transactions) divided by the average long-term market value during the period.
(g) During the fiscal year ended July 31, 2015, the Adviser voluntarily reimbursed the Fund for certain expenses incurred in connection with a common share equity shelf program. As a result, the Expenses and Net Investment Income (Loss) Ratios to Average Net Assets Applicable to Common Shares reflect this voluntary expense reimbursement from Adviser.
(h) For the six months ended January 31, 2018.
* Annualized.
N/A The Fund does not have or no longer has a contractual reimbursement agreement with the Adviser.

 

See accompanying notes to financial statements.

 

NUVEEN     61  


Notes to

Financial Statements (Unaudited)

 

1. General Information and Significant Accounting Policies

General Information

Fund Information

The funds covered in this report and their corresponding New York Stock Exchange (“NYSE”) symbols are as follows (each a “Fund” and collectively, the “Funds”):

 

    Nuveen Preferred and Income Opportunities Fund (JPC)

 

    Nuveen Preferred and Income Term Fund (JPI)

 

    Nuveen Preferred and Income Securities Fund (JPS)

 

    Nuveen Preferred and Income 2022 Term Fund (JPT)

The Funds are registered under the Investment Company Act of 1940, as amended, as diversified (non-diversified for JPT), closed-end management investment companies. JPC, JPI, JPS and JPT were each organized as Massachusetts business trusts on January 27, 2003, April 18, 2012, June 24, 2002 and July 6, 2016, respectively.

The end of the reporting period for the Funds is January 31, 2018, and the period covered by these Notes to Financial Statements is the six months ended January 31, 2018 (the “current fiscal period”).

Effective September 29, 2017, JPC changed its name from Nuveen Preferred Income Opportunities Fund to the Nuveen Preferred and Income Opportunities Fund and JPS changed its name from Nuveen Preferred Securities Income Fund to the Nuveen Preferred and Income Securities Fund.

Investment Adviser

The Funds’ investment adviser is Nuveen Fund Advisors, LLC (the “Adviser”), a subsidiary of Nuveen, LLC (“Nuveen”). Nuveen is the investment management arm of Teachers Insurance and Annuity Association of America (TIAA). The Adviser has overall responsibility for management of the Funds, oversees the management of the Funds’ portfolios, manages the Funds’ business affairs and provides certain clerical, bookkeeping and other administrative services, and, if necessary, asset allocation decisions. The Adviser has entered into sub-advisory agreements with NWQ Investment Management Company, LLC (“NWQ”), an affiliate of Nuveen, Spectrum Asset Management, Inc. (“Spectrum”), and/or Nuveen Asset Management LLC (“NAM”), a subsidiary of the Adviser, (each a “Sub-Adviser” and collectively, the “Sub-Advisers”). NWQ and NAM are each responsible for approximately half of JPC’s portfolio. NAM manages the investment portfolio of JPI and JPT, while Spectrum manages the investment portfolio of JPS. The Adviser is responsible for managing JPC’s, JPI’s and JPS’s investments in swap contracts.

Investment Objectives and Principal Investment Strategies

JPC’s investment objective is to provide high current income and total return. For the period August 1, 2017 through September 28, 2017, the Fund invested at least 80% of its managed assets (as defined in Note 7 – Management Fees and Other Transactions with Affiliates) in preferred securities, and up to 20% opportunistically over the market cycle in other types of securities, primarily income-oriented securities such as corporate and taxable municipal debt and common equity. Effective September 29, 2017, the Fund invests at least 80% of the sum of its net assets and the amount of any borrowings for investment purposes in preferred and other income producing securities, including hybrid securities such as contingent capital securities and up to 20% opportunistically in other income-oriented securities such as corporate and taxable municipal debt and dividend paying common equity. At least 50% of its managed assets are rated investment grade (BBB/Baa or better by S&P, Moody’s, or Fitch) at the time of investment.

JPI’s investment objective is to provide a high level of current income and total return by investing at least 80% of its managed assets in preferred and other income producing securities. At least 50% of its managed assets are rated investment grade (BBB/Baa or better by one of the nationally recognized statistical rating organizations “NRSROs”) at the time of investment.

JPS’s investment objective is high current income consistent with capital preservation. The Fund’s secondary investment objective is to enhance portfolio value. For the period August 1, 2017 through September 28, 2017, the Fund invested at least 80% of its managed assets in preferred securities and up to 20% of its managed assets in debt securities, including convertible debt securities and convertible preferred securities. Effective September 29, 2017, the Fund invests at least 80% of the sum of its net assets and the amount of any borrowings for investment purposes in preferred and other income producing securities, including hybrid securities such as contingent capital securities. The Fund invests at least 50% of its managed assets are rated investment grade (BBB/Baa or better by S&P, Moody’s, or Fitch) at the time of investment.

 

  62     NUVEEN


 

JPT’s investment objective is to provide a high level of current income and total return by investing at least 80% of its managed assets in preferred and other income-producing securities. The Fund may invest without limit in investment grade securities (BB+/Ba1 or lower) but no more than 10% in securities rated below B-/B3 at the time of investment. Up to 40% of its managed assets may be in securities issued by companies located anywhere in the world, but no more than 10% in securities of issuers in emerging market countries, and 100% in U.S. dollar-denominated securities. The Fund does not invest in contingent capital securities (“CoCos”).

Significant Accounting Policies

Each Fund is an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (ASC) Topic 946 “Financial Services – Investment Companies.” The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

Investment Transactions

Investment transactions are recorded on a trade date basis. Realized gains and losses from investment transactions are determined on the specific identification method, which is the same basis used for federal income tax purposes. Investments purchased on a when-issued/delayed delivery basis may have extended settlement periods. Any investments so purchased are subject to market fluctuation during this period. The Funds have earmarked securities in their portfolios with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments.

As of the end of the reporting period, the Funds did not have any outstanding when-issued/delayed delivery purchase commitments.

Investment Income

Dividend income is recorded on the ex-dividend date or, for foreign securities, when information is available. Non-cash dividends received in the form of stock, if any, are recognized on the ex-dividend date and recorded at fair value. Interest income, which reflects the amortization of premiums and includes accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Interest income also reflects payment-in-kind (“PIK”) interest and paydown gains and losses, if any. PIK interest represents income received in the form of securities in lieu of cash. Other income is comprised of fees earned in connection with the rehypothecation of pledged collateral as further described in Note 8 – Fund Leverage, Rehypothecation.

Professional Fees

Professional fees presented on the Statement of Operations consist of legal fees incurred in the normal course of operations, audit fees, tax consulting fees and, in some cases, workout expenditures. Workout expenditures are incurred in an attempt to protect or enhance an investment or to pursue other claims or legal actions on behalf of Fund shareholders. If a refund is received for workout expenditures paid in a prior reporting period, such amounts will be recognized as “Legal fee refund” on the Statement of Operations.

Dividends and Distributions to Common Shareholders

Dividends to common shareholders, if any, are declared monthly. Net realized capital gains from investment transactions, if any, are declared and distributed to shareholders at least annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards.

Distributions to common shareholders are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP.

Compensation

The Funds pay no compensation directly to those of its trustees who are affiliated with the Adviser or to its officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. The Funds’ Board of Trustees (the ‘‘Board’’) has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen-advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised funds.

Indemnifications

Under the Funds’ organizational documents, their officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.

Netting Agreements

In the ordinary course of business, the Funds may enter into transactions subject to enforceable master repurchase agreements, International Swaps and Derivatives Association, Inc. (ISDA) master agreements or other similar arrangements (“netting agreements”). Generally, the right to offset in netting

 

NUVEEN     63  


Notes to Financial Statements (Unaudited) (continued)

 

agreements allows each Fund to offset certain securities and derivatives with a specific counterparty, when applicable, as well as any collateral received or delivered to that counterparty based on the terms of the agreements. Generally, each Fund manages its cash collateral and securities collateral on a counterparty basis.

The Funds’ investments subject to netting agreements as of the end of the reporting period, if any, are further described in Note 3 – Portfolio Securities and Investments in Derivatives.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to common shares from operations during the current fiscal period. Actual results may differ from those estimates.

2. Investment Valuation and Fair Value Measurements

The fair valuation input levels as described below are for fair value measurement purposes.

Fair value is defined as the price that would be received upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The following is a summary of the three-tiered hierarchy of valuation input levels.

 

Level 1 –   Inputs are unadjusted and prices are determined using quoted prices in active markets for identical securities.
Level 2 –   Prices are determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 –   Prices are determined using significant unobservable inputs (including management’s assumptions in determining the fair value of investments).

Common stocks and other equity-type securities are valued at the last sales price on the securities exchange on which such securities are primarily traded and are generally classified as Level 1. Securities primarily traded on the NASDAQ National Market (“NASDAQ”) are valued at the NASDAQ Official Closing Price and are generally classified as Level 1. However, securities traded on a securities exchange or NASDAQ for which there were no transactions on a given day or securities not listed on a securities exchange or NASDAQ are valued at the quoted bid price and are generally classified as Level 2. Prices of certain American Depositary Receipts (“ADR”) held by the Funds that trade in the United States are valued based on the last traded price, official closing price or the most recent bid price of the underlying non- U.S.-traded stock, adjusted as appropriate for the underlying-to-ADR conversion ratio and foreign exchange rate, and from time-to-time may also be adjusted further to take into account material events that may take place after the close of the local non-U.S. market but before the close of the NYSE, which may represent a transfer from a Level 1 to a Level 2 security.

Prices of fixed-income securities are provided by an independent pricing service (“pricing service”) approved by the Board. The pricing service establishes a security’s fair value using methods that may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. These securities are generally classified as Level 2. In pricing certain securities, particularly less liquid and lower quality securities, the pricing service may consider information about a security, its issuer or market activity, provided by the Adviser. These securities are generally classified as Level 2 or Level 3 depending on the observability of the significant inputs.

Prices of swap contracts are also provided by a pricing service approved by the Board using the same methods as described above, and are generally classified as Level 2.

Investments in investment companies are valued at their respective NAVs on valuation date and are generally classified as Level 1.

Futures contracts are valued using the closing settlement price or, in the absence of such a price, the last traded price and are generally classified as Level 1.

Repurchase agreements are valued at contract amount plus accrued interest, which approximates market value. These securities are generally classified as Level 2.

Investments initially valued in currencies other than the U.S. dollar are converted to the U.S. dollar using exchange rates obtained from pricing services. As a result, the NAV of the Funds’ shares may be affected by changes in the value of currencies in relation to the U.S. dollar. The value of securities traded in markets outside the United States or denominated in currencies other than the U.S. dollar may be affected significantly on a day that the NYSE is closed

 

  64     NUVEEN


 

and an investor is not able to purchase, redeem or exchange shares. If significant market events occur between the time of determination of the closing price of a foreign security on an exchange and the time that the Funds’ NAV is determined, or if under the Funds’ procedures, the closing price of a foreign security is not deemed to be reliable, the security would be valued at fair value as determined in accordance with procedures established in good faith by the Board. These securities are generally classified as Level 2 or Level 3 depending on the observability of the significant inputs.

Certain securities may not be able to be priced by the pre-established pricing methods as described above. Such securities may be valued by the Board and/or its appointee at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933, as amended) for which a pricing service is unable to provide a market price; securities whose trading has been formally suspended; debt securities that have gone into default and for which there is no current market quotation; a security whose market price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of a Fund’s NAV (as may be the case in non-U.S. markets on which the security is primarily traded) or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the pricing service, is not deemed to reflect the security’s fair value. As a general principle, the fair value of a security would appear to be the amount that the owner might reasonably expect to receive for it in a current sale. A variety of factors may be considered in determining the fair value of such securities, which may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. These securities are generally classified as Level 2 or Level 3 depending on the observability of the significant inputs. Regardless of the method employed to value a particular security, all valuations are subject to review by the Board and/or its appointee.

The inputs or methodologies used for valuing securities are not an indication of the risks associated with investing in those securities. The following is a summary of each Fund’s fair value measurements as of the end of the reporting period:

 

JPC    Level 1      Level 2      Level 3      Total  

Long-Term Investments*:

           

$1,000 Par (or similar) Institutional Preferred

   $      $ 755,442,317      $      $ 755,442,317  

$25 Par (or similar) Retail Preferred

     402,482,394        77,218,412 **              479,700,806  

Contingent Capital Securities

            266,236,885               266,236,885  

Corporate Bonds

            110,797,014               110,797,014  

Convertible Preferred Securities

     11,857,416                      11,857,416  

Common Stocks

     2,935,358                      2,935,358  

Short-Term Investments:

           

Repurchase Agreements

            21,717,039               21,717,039  

Investments in Derivatives:

           

Interest Rate Swaps***

            9,697,121               9,697,121  

Total

   $ 417,275,168      $ 1,241,108,788      $      $ 1,658,383,956  
JPI                                

Long-Term Investments*:

           

$1,000 Par (or similar) Institutional Preferred

   $      $ 374,252,653      $      $ 374,252,653  

Contingent Capital Securities

            237,208,790               237,208,790  

$25 Par (or similar) Retail Preferred

     124,169,676        64,014,779 **              188,184,455  

Corporate Bonds

            2,042,738               2,042,738  

Short-Term Investments:

           

Repurchase Agreements

            2,594,925               2,594,925  

Investments in Derivatives:

           

Interest Rate Swaps***

            2,883,388               2,883,388  

Total

   $ 124,169,676      $ 682,997,273      $      $ 807,166,949  

 

NUVEEN     65  


Notes to Financial Statements (Unaudited) (continued)

 

JPS    Level 1      Level 2      Level 3      Total  

Long-Term Investments*:

           

$1,000 Par (or similar) Institutional Preferred

   $      $ 1,468,947,590      $      $ 1,468,947,590  

Contingent Capital Securities

            1,172,420,481               1,172,420,481  

$25 Par (or similar) Retail Preferred

     264,800,405        63,521,743 **              328,322,148  

Investment Companies

     23,939,292                      23,939,292  

Corporate Bonds

            17,489,148               17,489,148  

Convertible Preferred Securities

     16,256,000                      16,256,000  

Short-Term Investments:

           

Repurchase Agreements

            69,723,169               69,723,169  

Investments in Derivatives:

           

Interest Rate Swaps***

            18,206,126               18,206,126  

Total

   $ 304,995,697      $ 2,810,308,257      $      $ 3,115,303,954  
JPT                                

Long-Term Investments*:

           

$1,000 Par (or similar) Institutional Preferred

   $      $ 165,637,837      $      $ 165,637,837  

$25 Par (or similar) Retail Preferred

     40,022,142        3,821,370 **              43,843,512  

Short-Term Investments:

           

Repurchase Agreements

            2,079,568               2,079,568  

Investments in Derivatives:

           

Futures Contracts***

     43,299                      43,299  

Total

   $ 40,065,441      $ 171,538,775      $      $ 211,604,216  
* Refer to the Fund’s Portfolio of Investments for industry classifications, when applicable.
** Refer to the Fund’s Portfolio of Investments for securities classified as Level 2.
*** Represents net unrealized appreciation (depreciation) as reported in the Fund’s Portfolio of Investments.

The Board is responsible for the valuation process and has appointed the oversight of the daily valuation process to the Adviser’s Valuation Committee. The Valuation Committee, pursuant to the valuation policies and procedures adopted by the Board, is responsible for making fair value determinations, evaluating the effectiveness of the Funds’ pricing policies and reporting to the Board. The Valuation Committee is aided in its efforts by the Adviser’s dedicated Securities Valuation Team, which is responsible for administering the daily valuation process and applying fair value methodologies as approved by the Valuation Committee. When determining the reliability of independent pricing services for investments owned by the Funds, the Valuation Committee, among other things, conducts due diligence reviews of the pricing services and monitors the quality of security prices received through various testing reports conducted by the Securities Valuation Team.

The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making a fair value determination, based on the facts and circumstances specific to the portfolio instrument. Fair value determinations generally will be derived as follows, using public or private market information:

 

  (i) If available, fair value determinations shall be derived by extrapolating from recent transactions or quoted prices for identical or comparable securities.

 

  (ii) If such information is not available, an analytical valuation methodology may be used based on other available information including, but not limited to: analyst appraisals, research reports, corporate action information, issuer financial statements and shelf registration statements. Such analytical valuation methodologies may include, but are not limited to: multiple of earnings, discount from market value of a similar freely-traded security, discounted cash flow analysis, book value or a multiple thereof, risk premium/yield analysis, yield to maturity and/or fundamental investment analysis.

The purchase price of a portfolio instrument will be used to fair value the instrument only if no other valuation methodology is available or deemed appropriate, and it is determined that the purchase price fairly reflects the instrument’s current value.

For each portfolio security that has been fair valued pursuant to the policies adopted by the Board, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such testing and fair valuation occurrences are reported to the Board.

3. Portfolio Securities and Investments in Derivatives

Portfolio Securities

Foreign Currency Transactions

To the extent that a Fund may invest in securities and/or contracts that are denominated in a currency other than U.S. dollars, the Fund will be subject to currency risk, which is the risk that an increase in the U.S. dollar relative to the foreign currency will reduce returns or portfolio value. Generally, when the U.S. dollar rises in value against a foreign currency, the Fund’s investments denominated in that currency will lose value because its currency is worth

 

  66     NUVEEN


 

fewer U.S. dollars; the opposite effect occurs if the U.S. dollar falls in relative value. Investments and other assets and liabilities denominated in foreign currencies are converted into U.S. dollars on a spot (i.e. cash) basis at the spot rate prevailing in the foreign currency exchange market at the time of valuation. Purchases and sales of investments and income denominated in foreign currencies are translated into U.S. dollars on the respective dates of such transactions.

As of the end of the reporting period, the Funds’ investments in non-U.S. securities were as follows:

 

JPC      Value      % of Total
Investments
 

Country:

       

United Kingdom

     $ 152,830,978        9.3

France

       70,083,116        4.3  

Italy

       50,165,488        3.0  

Canada

       43,407,519        2.6  

Switzerland

       33,601,641        2.0  

Other

       109,656,772        6.7  

Total non-U.S. securities

     $ 459,745,514        27.9
JPI                  

Country:

       

United Kingdom

     $ 102,575,504        12.8

France

       60,747,267        7.6  

Italy

       43,929,253        5.5  

Switzerland

       30,024,664        3.7  

Australia

       27,711,468        3.4  

Other

       82,352,298        10.2  

Total non-U.S. securities

     $ 347,340,454        43.2
JPS                  

Country:

       

United Kingdom

     $ 565,990,916        18.3

France

       338,708,389        10.9  

Switzerland

       215,136,415        6.9  

Sweden

       104,784,153        3.4  

Other

       388,372,448        12.6  

Total non-U.S. securities

     $ 1,612,992,321        52.1
JPT                  

Country:

       

United Kingdom

     $ 14,376,360        6.8

Australia

       11,353,784        5.4  

France

       9,202,765        4.3  

Canada

       5,650,000        2.7  

Other

       15,667,977        7.4  

Total non-U.S. securities

     $ 56,250,886        26.6

The books and records of the Funds are maintained in U.S. dollars. Foreign currencies, assets and liabilities are translated into U.S. dollars at 4:00 p.m. Eastern Time. Investment transactions, income and expenses are translated on the respective dates of such transactions. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date of the transactions, foreign currency transactions and the difference between the amounts of interest and dividends recorded on the books of a Fund and the amounts actually received.

The realized gains and losses resulting from changes in foreign currency exchange rates and changes in foreign exchange rates associated with (i) foreign currency, (ii) investments, (iii) investments in derivatives and (iv) other assets and liabilities are recognized as a component of “Net realized gain (loss) from investments and foreign currency” on the Statement of Operations, when applicable.

The unrealized gains and losses resulting from changes in foreign currency exchange rates and changes in foreign exchange rates associated with (i) investments and (ii) other assets and liabilities are recognized as a component of “Change in net unrealized appreciation (depreciation) of investments and foreign currency” on the Statement of Operations, when applicable. The unrealized gains and losses resulting from changes in foreign exchange rates associated with investments in derivatives are recognized as a component of the respective derivative’s related “Change in net unrealized appreciation (depreciation)” on the Statement of Operations, when applicable.

 

NUVEEN     67  


Notes to Financial Statements (Unaudited) (continued)

 

Repurchase Agreements

In connection with transactions in repurchase agreements, it is each Fund’s policy that its custodian take possession of the underlying collateral securities, the fair value of which exceeds the principal amount of the repurchase transaction, including accrued interest, at all times. If the counterparty defaults, and the fair value of the collateral declines, realization of the collateral may be delayed or limited.

The following table presents the repurchase agreements for the Funds that are subject to netting agreements as of the end of the reporting period, and the collateral delivered related to those repurchase agreements.

 

Fund    Counterparty    Short-Term
Investments, at Value
       Collateral
Pledged (From)
Counterparty*
       Net
Exposure
 
JPC   

Fixed Income Clearing Corporation

   $ 21,717,039        $ (21,717,039      $  
JPI   

Fixed Income Clearing Corporation

     2,594,925          (2,594,925         
JPS   

Fixed Income Clearing Corporation

     69,723,169          (69,723,169         
JPT   

Fixed Income Clearing Corporation

     2,079,568          (2,079,568         
* As of the end of the reporting period, the value of the collateral pledged from the counterparty exceeded the value of the repurchase agreements. Refer to the Fund’s Portfolio of Investments for details on the repurchase agreements.

Zero Coupon Securities

A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically.

Investments in Derivatives

Each Fund is authorized to invest in certain derivative instruments, such as futures, options and swap contracts. Each Fund limits its investments in futures, options on futures and swap contracts to the extent necessary for the Adviser to claim the exclusion from registration by the Commodity Futures Trading Commission as a commodity pool operator with respect to the Fund. The Funds record derivative instruments at fair value, with changes in fair value recognized on the Statement of Operations, when applicable. Even though the Funds’ investments in derivatives may represent economic hedges, they are not considered to be hedge transactions for financial reporting purposes.

Futures Contracts

Upon execution of a futures contract, a Fund is obligated to deposit cash or eligible securities, also known as ‘‘initial margin,’’ into an account at its clearing broker equal to a specified percentage of the contract amount. Cash held by the broker to cover initial margin requirements on open futures contracts, if any, is recognized as ‘‘Cash collateral at broker for investments in futures contracts’’ on the Statement of Assets and Liabilities. Investments in futures contracts obligate a Fund and the clearing broker to settle monies on a daily basis representing changes in the prior days ‘‘mark-to-market’’ of the open contracts. If a Fund has unrealized appreciation the clearing broker would credit the Fund’s account with an amount equal to appreciation and conversely if a Fund has unrealized depreciation the clearing broker would debit the Fund’s account with an amount equal to depreciation. These daily cash settlements are also known as ‘‘variation margin.’’ Variation margin is recognized as a receivable and/or payable for ‘‘Variation margin on futures contracts’’ on the Statement of Assets and Liabilities.

During the period the futures contract is open, changes in the value of the contract are recognized as an unrealized gain or loss by ‘‘marking-to-market’’ on a daily basis to reflect the changes in market value of the contract, which is recognized as a component of ‘‘Change in net unrealized appreciation (depreciation) of futures contracts’’ on the Statement of Operations. When the contract is closed or expired, a Fund records a realized gain or loss equal to the difference between the value of the contract on the closing date and value of the contract when originally entered into, which is recognized as a component of ‘‘Net realized gain (loss) from futures contracts’’ on the Statement of Operations.

Risks of investments in futures contracts include the possible adverse movement in the price of the securities or indices underlying the contracts, the possibility that there may not be a liquid secondary market for the contracts and/or that a change in the value of the contract may not correlate with a change in the value of the underlying securities or indices.

During the current fiscal period, JPT invested in short interest rate futures to manage the Fund’s exposure to various points along the yield curve, with a net effect of decreasing the Fund’s overall interest rate sensitivity.

 

  68     NUVEEN


 

The average notional amount of futures contracts outstanding during the current fiscal period was as follows:

 

Average notional amount of futures contracts outstanding*

    $10,817,511  
* The average notional amount is calculated based on the absolute aggregate notional of contracts outstanding at the beginning of the current fiscal period and at the end of each quarter within the current fiscal period.

The following table presents the fair value of all futures contracts held by JPT as of the end of the reporting period, the location of these instruments on the Statement of Assets and Liabilities and the primary underlying risk exposure.

 

        

Location on the Statement of Assets and Liabilities

 
Underlying
Risk Exposure
   Derivative
Instrument
 

Asset Derivatives

         

(Liability) Derivatives

 
     Location    Value            Location    Value  
Interest rate    Futures contracts   Receivable for variation margin on futures contracts*    $ 43,299                $  
* Value represents unrealized appreciation (depreciation) of futures contracts as reported in the Fund’s Portfolio of Investments, and not the asset and/or liability derivative location as described in the table above.

The following table presents the amount of net realized gain (loss) and change in net unrealized appreciation (depreciation) recognized on futures contracts on the Statement of Operations during the current fiscal period, and the primary underlying risk exposure.

 

Underlying Risk Exposure     

Derivative

Instrument

    

Net Realized

Gain (Loss)

from Futures

Contracts

       Change in Net
Unrealized Appreciation
(Depreciation) of
Futures Contracts
 

Interest rate

    

Futures contracts

     $ 22,100        $ 62,379  

Interest Rate Swap Contracts

Interest rate swap contracts involve a Fund’s agreement with the counterparty to pay or receive a fixed rate payment in exchange for the counterparty receiving or paying a variable rate payment. Forward interest rate swap contracts involve a Fund’s agreement with a counterparty to pay, in the future, a fixed or variable rate payment in exchange for the counterparty paying the Fund a variable or fixed rate payment, the accruals for which begin at a specified date in the future (the “effective date”).

The amount of the payment obligation for an interest rate swap is based on the notional amount and the termination date of the contract. Interest rate swap contracts do not involve the delivery of securities or other underlying assets or principal. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the net amount of interest payments that the Fund is to receive.

Interest rate swap contracts are valued daily. Upon entering into an interest rate swap contract (and beginning on the effective date for a forward interest rate swap contract), the Fund accrues the fixed rate payment expected to be paid or received and the variable rate payment expected to be received or paid on the interest rate swap contracts on a daily basis, and recognizes the daily change in the fair value of the Fund’s contractual rights and obligations under the contracts. For an OTC swap, that is not cleared through a clearing house (“OTC Uncleared”), the amount recorded on these transactions is recognized on the Statement of Assets and Liabilities as a component of “Unrealized appreciation or depreciation on interest rate swaps.”

Upon the execution of an OTC swap cleared through a clearing house (“OTC Cleared”), the Fund is obligated to deposit cash or eligible securities, also known as “initial margin,” into an account at its clearing broker equal to a specified percentage of the contract amount. Cash deposited by the Fund to cover initial margin requirements on open swap contracts, if any, is recognized as a component of “Cash collateral at brokers for investments in swaps” on the Statement of Assets and Liabilities. Investments in OTC Cleared swaps obligate the Fund and the clearing broker to settle monies on a daily basis representing changes in the prior day’s “mark-to-market” of the swap contract. If the Fund has unrealized appreciation, the clearing broker will credit the Fund’s account with an amount equal to the appreciation. Conversely, if the Fund has unrealized depreciation, the clearing broker will debit the Fund’s account with an amount equal to the depreciation. These daily cash settlements are also known as “variation margin.” Variation margin for OTC Cleared swaps is recognized as a receivable and/or payable for “Variation margin on swap contracts” on the Statement of Assets and Liabilities. Upon the execution of an OTC Uncleared swap, neither the Fund nor the counterparty is required to deposit initial margin as the trades are recorded bilaterally between both parties to the swap contract, and the terms of the variation margin are subject to a predetermined threshold negotiated by the Fund and the counterparty. Variation margin for OTC Uncleared swaps is recognized as a component of “Unrealized appreciation or depreciation on interest rate swaps” as described in the preceding paragraph.

The net amount of periodic payments settled in cash are recognized as a component of “Net realized gain (loss) from swaps” on the Statement of Operations, in addition to the net realized gain or loss recorded upon the termination of the swap contract. For tax purposes, payments expected to be

 

NUVEEN     69  


Notes to Financial Statements (Unaudited) (continued)

 

received or paid on the swap contracts are treated as ordinary income or expense, respectively. Changes in the value of the swap contracts during the fiscal period are recognized as a component of “Change in net unrealized appreciation (depreciation) of swaps” on the Statement of Operations. In certain instances, payments are made or received upon entering into the swap contract to compensate for differences between the stated terms of the swap agreements and prevailing market conditions (credit spreads, currency exchange rates, interest rates, and other relevant factors). Payments received or made at the beginning of the measurement period, if any, are recognized as “Interest rate swaps premiums received and/or paid” on the Statement of Assets and Liabilities.

During the current fiscal period, JPC, JPI and JPS continued to utilize forward starting interest rate swap contracts to partially hedge the interest cost of leverage, which as mentioned previously, is through the use of bank borrowings.

The average notional amount of interest rate swap contracts outstanding during the current fiscal period was as follows:

 

        JPC      JPI      JPS  

Average notional amount of interest rate swap contracts outstanding*

     $ 353,697,333      $ 168,250,000      $ 672,712,667  
* The average notional amount is calculated based on the outstanding notional at the beginning of the current fiscal period and at the end of each fiscal quarter within the current fiscal period.

The following table presents the fair value of all swap contracts held by the Funds as of the end of the reporting period, the location of these instruments on the Statement of Assets and Liabilities and the primary underlying risk exposure.

 

        

Location on the Statement of Assets and Liabilities

 

Underlying

Risk Exposure

  

Derivative

Instrument

 

Asset Derivatives

         

(Liability) Derivatives

 
     Location    Value            Location   Value  
JPC  
Interest rate    Swaps (OTC Uncleared)   Unrealized appreciation on interest rate swaps**    $ 9,697,121            

  $  
JPI  
Interest rate    Swaps (OTC Uncleared)   Unrealized appreciation on interest rate swaps**    $ 2,883,388            

  $  
JPS  
Interest rate    Swaps (OTC Uncleared)   Unrealized appreciation on interest rate swaps**    $ 18,206,126            

  $  
** Some swap contracts require a counterparty to pay or receive a premium, which is disclosed in the Statement of Assets and Liabilities, when applicable, and is not reflected in the cumulative unrealized appreciation (depreciation) presented above.

The following table presents the swap contracts subject to netting agreements and the collateral delivered related to those swap contracts as of the end of the reporting period.

 

Fund    Counterparty   Gross
Unrealized
Appreciation
on Interest
Rate Swaps***
    Gross
Unrealized
(Depreciation)
on Interest
Rate Swaps***
    Net
Unrealized
Appreciation
(Depreciation)
on Interest
Rate Swaps
    Collateral
Pledged
to (from)
Counterparty
    Net
Exposure
 
JPC    Morgan Stanley Capital Services LLC   $ 9,697,121     $     $ 9,697,121     $ (9,553,289   $ 143,832  
JPI    Morgan Stanley Capital Services LLC     2,883,388             2,883,388       (2,793,906     89,482  
JPS    Morgan Stanley Capital Services LLC     18,206,126             18,206,126       (17,936,969     269,157  
*** Represents gross unrealized appreciation (depreciation) for the counterparty as reported in the Fund’s Portfolio of Investments.

The following table presents the amount of net realized gain (loss) and change in net unrealized appreciation (depreciation) recognized on swap contracts on the Statement of Operations during the current fiscal period, and the primary underlying risk exposure.

 

Fund      Underlying
Risk Exposure
     Derivative
Instrument
     Net Realized
Gain (Loss)
from Swaps
       Change in Net
Unrealized
Appreciation
(Depreciation)
of Swaps
 
JPC      Interest rate      Swaps      $ (1,433,628      $   11,833,987  
JPI      Interest rate      Swaps        (1,831,550        5,507,342  
JPS      Interest rate      Swaps        (2,855,167        22,430,428  

 

  70     NUVEEN


 

Market and Counterparty Credit Risk

In the normal course of business each Fund may invest in financial instruments and enter into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the other party to the transaction to perform (counterparty credit risk). The potential loss could exceed the value of the financial assets recorded on the financial statements. Financial assets, which potentially expose each Fund to counterparty credit risk, consist principally of cash due from counterparties on forward, option and swap transactions, when applicable. The extent of each Fund’s exposure to counterparty credit risk in respect to these financial assets approximates their carrying value as recorded on the Statement of Assets and Liabilities.

Each Fund helps manage counterparty credit risk by entering into agreements only with counterparties the Adviser believes have the financial resources to honor their obligations and by having the Adviser monitor the financial stability of the counterparties. Additionally, counterparties may be required to pledge collateral daily (based on the daily valuation of the financial asset) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when each Fund has an unrealized loss, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the valuations fluctuate, either up or down, by at least the pre-determined threshold amount.

4. Fund Shares

Common Share Transactions

Transactions in common shares during the Funds’ current and prior fiscal period were as follows:

 

    JPC           JPI  
     Six Months Ended
1/31/18
     Year Ended
7/31/17
           Six Months Ended
1/31/18
     Year Ended
7/31/17
 

Common shares:

           

Issued in the reorganizations

           6,435,292                 

Issued to shareholders due to reinvestment of distributions

                                2,961  

 

    JPS           JPT*  
     Six Months Ended
1/31/18
    Year Ended
7/31/17
           Six Months Ended
1/31/18
    For the Period 1/26/17
(commencement
of operations)
through 7/31/17
 

Common shares:

         

Issued in the reorganizations

                         

Sold

                        6,815,563  

Issued to shareholders due to reinvestment of distributions

    10,637                     4,889       3,917  
* Prior to the commencement of operations, the Adviser purchased 4,072 shares, which are still held as of the end of the reporting period.

5. Investment Transactions

Long-term purchases and sales (including maturities but excluding derivative transactions, where applicable) during the current fiscal period, were as follows:

 

        JPC      JPI      JPS      JPT  

Purchases

     $ 245,158,431      $ 91,089,453      $ 91,171,266      $ 28,524,235  

Sales and maturities

       214,558,118        90,200,014        157,089,915        28,935,394  

6. Income Tax Information

Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all of its net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required.

For all open tax years and all major taxing jurisdictions, management of the Funds has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Open tax years are those that are open for examination by taxing authorities (i.e., generally the last four tax year ends and the interim tax period since then). Furthermore, management of the Funds is also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

 

NUVEEN     71  


Notes to Financial Statements (Unaudited) (continued)

 

The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to recognition of premium amortization, timing differences in the recognition of income on real estate investment trust (“REIT”) investments and timing differences in recognizing certain gains and losses on investment transactions. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts as detailed below. Temporary differences do not require reclassification. Temporary and permanent differences do not impact the NAVs of the Funds.

The tables below present the cost and unrealized appreciation (depreciation) of each Fund’s investment portfolio, as determined on a federal income tax basis, as of January 31, 2018.

For purposes of this disclosure, derivative tax cost is generally the sum of any upfront fees or premiums exchanged and any amounts unrealized for income statement reporting but realized in income and/or capital gains tax reporting. If a particular derivative category does not disclose any tax unrealized appreciation or depreciation, the change in value of those derivatives have generally been fully realized for tax purposes.

 

      JPC      JPI      JPS      JPT  

Tax cost of investments

   $ 1,574,662,039      $ 753,566,098      $ 2,883,458,833      $ 209,072,361  

Gross unrealized:

           

Appreciation

   $ 84,328,398      $ 52,172,871      $ 257,629,492      $ 4,718,315  

Depreciation

     (10,303,602      (1,455,408      (43,990,497      (2,229,759

Net unrealized appreciation (depreciation) of investments

   $ 74,024,796      $ 50,717,463      $ 213,638,995      $ 2,488,556  

 

Tax cost of futures contracts

       $                   —        $                —        $                   —        $         43,299  

Net unrealized appreciation (depreciation) of futures contracts

                             

 

Tax cost of swaps

       $                   —        $                —        $                   —        $                —  

Net unrealized appreciation (depreciation) of swaps

       9,697,121        2,883,388        18,206,126         

Permanent differences, primarily due to bond premium amortization adjustments, complex securities character adjustments, federal taxes paid, investments in partnerships, expiration of capital loss carryforwards, nondeductible reorganization expenses and reorganization adjustments resulted in reclassifications among the Funds’ components of common share net assets as of July 31, 2017, the Funds’ last tax year end, as follows:

 

        JPC        JPI        JPS      JPT  

Paid-in-surplus

     $ (200,893,667      $ (1,556      $ (318,467,753    $     —  

Undistributed (Over-distribution of) net investment income

       699,835          225,787          1,918,336        (81,999

Accumulated net realized gain (loss)

       200,193,832          (224,231        316,549,417        81,999  

The tax components of undistributed net ordinary income and net long-term capital gains as of July 31, 2017, the Funds’ last tax year end, were as follows:

 

        JPC        JPI        JPS        JPT  

Undistributed net ordinary income1

     $     —        $     —        $ 12,560,159        $ 1,480,268  

Undistributed net long-term capital gains

                                   

1  Undistributed net ordinary income (on a tax basis) has not been reduced for the dividend declared on July 1, 2017 and paid on August 1, 2017. Net ordinary income consists of net taxable income derived from dividends, interest, and net short-term capital gains, if any.

   

The tax character of distributions paid during the Funds’ last tax year ended July 31, 2017, was designated for purposes of the dividends paid deduction as follows:

 

        JPC      JPI      JPS      JPT3  

Distributions from net ordinary income2

     $ 74,906,763      $ 40,620,651      $ 151,632,579      $ 3,479,263  

Distributions from net long-term capital gains

                             

Return of capital

       1,478,980        1,638,466                

 

2  Net ordinary income consists of net taxable income derived from dividends, interest, net short-term capital gains if any.
3  For the period January 26, 2017 (commencement of operations) through July 31, 2017.

 

  72     NUVEEN


 

As of July 31, 2017, the Funds’ last tax year end, the Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as shown in the following table. The losses not subject to expiration will be utilized first by a Fund.

 

        JPC4        JPI        JPS4        JPT  

Expiration:

                   

July 31, 2018

     $ 9,385,427        $     —        $ 321,212,384        $     —  

July 31, 2019

                         10,696,373           

Not subject to expiration

       14,017,122          3,825,569          3,242,529          609,903  

Total

     $ 23,402,549        $ 3,825,569        $ 335,151,286        $ 609,903  

 

4  A portion of JPC’s and JPS’s capital loss carryforwards is subject to an annual limitation under the Internal Revenue Code and related regulations.

As of July 31, 2017, the Funds’ last tax year end, the following Funds’ capital loss carryforwards expired as follows:

 

        JPC      JPS  

Expired capital loss carryforwards

     $ 204,895,930      $ 318,378,070  

During the Funds’ last tax year ended July 31, 2017, JPC utilized $8,851,976 of its capital loss carryforward.

7. Management Fees

Each Fund’s management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Sub-Advisers are compensated for their services to the Funds from the management fees paid to the Adviser. Spectrum also receives compensation on certain portfolio transactions for providing brokerage services to JPS. During the current fiscal period, JPS paid Spectrum commissions of $48,292.

Each Fund’s management fee consists of two components – a fund-level fee, based only on the amount of assets within each individual Fund, and a complex-level fee, based on the aggregate amount of all eligible fund assets managed by the Adviser. This pricing structure enables each Fund’s shareholders to benefit from growth in the assets within their respective Fund as well as from growth in the amount of complex-wide assets managed by the Adviser.

The annual fund-level fee, payable monthly, for each Fund is calculated according to the following schedule:

 

Average Daily Managed Assets*      JPC      JPI      JPS      JPT  

For the first $500 million

       0.6800      0.7000      0.7000      0.7000

For the next $500 million

       0.6550        0.6750        0.6750        0.6750  

For the next $500 million

       0.6300        0.6500        0.6500        0.6500  

For the next $500 million

       0.6050        0.6250        0.6250        0.6250  

For managed assets over $2 billion

       0.5800        0.6000        0.6000        0.6000  

The annual complex-level fee, payable monthly, for each Fund is calculated by multiplying the current complex-wide fee rate, determined according to the following schedule by the Funds’ daily managed assets:

 

Complex-Level Eligible Asset Breakpoint Level*      Effective Complex-Level Fee Rate at Breakpoint Level  

$55 billion

       0.2000

$56 billion

       0.1996  

$57 billion

       0.1989  

$60 billion

       0.1961  

$63 billion

       0.1931  

$66 billion

       0.1900  

$71 billion

       0.1851  

$76 billion

       0.1806  

$80 billion

       0.1773  

$91 billion

       0.1691  

$125 billion

       0.1599  

$200 billion

       0.1505  

$250 billion

       0.1469  

$300 billion

       0.1445  
* For the complex-level fees, managed assets include closed-end fund assets managed by the Adviser that are attributable to certain types of leverage. For these purposes, leverage includes the funds’ use of preferred stock and borrowings and certain investments in the residual interest certificates (also called inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by a TOB trust that has been effectively financed by the trust’s issuance of floating rate securities, subject to an agreement by the Adviser as to certain funds to limit the amount of such assets for determining managed assets in certain circumstances. The complex-level fee is calculated based upon the aggregate daily managed assets of all Nuveen open-end and closed-end Funds that constitute “eligible assets.” Eligible assets do not include assets attributable to investments in other Nuveen funds or assets in excess of a determined amount (originally $2 billion) added to the Nuveen fund complex in connection with the Adviser’s assumption of the management of the former First American Funds effective January 1, 2011. As of January 31, 2018, the complex-level fee rate for each Fund was 0.1591%.

 

NUVEEN     73  


Notes to Financial Statements (Unaudited) (continued)

 

8. Fund Leverage

Borrowings

JPC, JPI, JPS, and JPT have each entered into a borrowing arrangement (collectively, “Borrowings”) which permit the Funds to borrow on a secured basis as a means of leverage. As of the end of the reporting period, each Fund’s maximum commitment amount under these Borrowings is as follows:

 

        JPC      JPI      JPS      JPT  

Maximum commitment amount

     $ 450,000,000      $ 225,000,000      $ 850,000,000      $ 45,000,000  

As of the end of the reporting period, each Fund’s outstanding balance on its Borrowings was as follows:

 

        JPC      JPI      JPS      JPT  

Outstanding balance on Borrowings

     $ 437,000,000      $ 225,000,000      $ 845,300,000      $ 42,500,000  

For JPC, JPI and JPS interest is charged on these Borrowings at 1-Month LIBOR (London Inter-Bank Offered Rate) plus 0.85% per annum (0.75% per annum for JPS) on the amounts borrowed and 0.50% per annum on the undrawn balance if the undrawn portion of the Borrowings on a particular day is more than 20% of the maximum commitment amount. JPT’s interest is charged on the Borrowings at a rate equal to the 1-month LIBOR plus 0.70% per annum on the amount borrowed. JPT is also charged a 0.125% commitment fee on the undrawn portion of the Borrowings.

During the current fiscal period, the average daily balance outstanding and average annual interest rate on each Fund’s Borrowings were as follows:

 

        JPC      JPI      JPS      JPT  

Average daily balance outstanding

     $ 441,478,261      $ 225,000,000      $ 845,300,000      $ 42,500,000  

Average annual interest rate

       2.19      2.19      2.09      2.01

In order to maintain these Borrowings, the Funds must meet certain collateral, asset coverage and other requirements. Borrowings outstanding are fully secured by eligible securities held in each Fund’s portfolio of investments.

Borrowings outstanding are recognized as “Borrowings” on the Statement of Assets and Liabilities. Interest expense incurred on the borrowed amount and undrawn balance are recognized as a component of “Interest expense” on the Statement of Operations.

Rehypothecation

JPC, JPI and JPS entered into a Rehypothecation Side Letter (“Side Letter”) with its prime brokerage lender, allowing it to re-register the Pledged Collateral in its own name or in a name other than the Funds’ to pledge, repledge, hypothecate, rehypothecate, sell, lend or otherwise transfer or use the Pledged Collateral (the “Hypothecated Securities”) with all rights of ownership as described in the Side Letter. Subject to certain conditions, the total value of the outstanding Hypothecated Securities shall not exceed the lesser of (i) 98% of the outstanding balance on the Borrowings to which the Pledged Collateral relates and (ii) 33 13% of the Funds’ total assets. The Funds may designate any Pledged Collateral as ineligible for rehypothecation. The Funds may also recall Hypothecated Securities on demand.

The Funds also have the right to apply and set-off an amount equal to one-hundred percent (100%) of the then-current fair market value of such Pledged Collateral against the current Borrowings under the Side Letter in the event that the prime brokerage lender fails to timely return the Pledged Collateral and in certain other circumstances. In such circumstances, however, the Funds may not be able to obtain replacement financing required to purchase replacement securities and, consequently, the Funds’ income generating potential may decrease. Even if a Fund is able to obtain replacement financing, it might not be able to purchase replacement securities at favorable prices.

The Funds will receive a fee in connection with the Hypothecated Securities (“Rehypothecation Fees”) in addition to any principal, interest, dividends and other distributions paid on the Hypothecated Securities.

As of the end of the reporting period, JPC, JPI and JPS each had Hypothecated Securities as follows:

 

     JPC        JPI        JPS  

Hypothecated Securities

  $ 342,175,999        $ 180,742,473        $ 471,556,757  

JPC, JPI and JPS earn Rehypothecation Fees, which are recognized as “Other income” on the Statement of Operations. During the current fiscal period, the Rehypothecation Fees earned by each Fund were as follows:

 

     JPC        JPI        JPS  

Rehypothecation Fees

  $ 106,117        $ 46,844        $ 122,241  

 

  74     NUVEEN


 

Reverse Repurchase Agreements

During the current fiscal period, JPC and JPS used reverse repurchase agreements as a means of leverage.

In a reverse repurchase agreement, the Funds sell to the counterparty a security that it holds with a contemporaneous agreement to repurchase the same security at an agreed-upon price and date, with the Funds retaining the risk of loss that is associated with that security. The Funds will pledge assets determined to be liquid by the Adviser to cover its obligations under reverse repurchase agreements. Securities sold under reverse repurchase agreements are recorded as a liability and recognized as “Reverse repurchase agreements” on the Statement of Assets and Liabilities.

Payments made on reverse repurchase agreements are recognized as a component of “Interest expense” on the Statement of Operations.

As of the end of the reporting period, the Funds’ outstanding balances on its reverse repurchase agreements were as follows:

 

Fund

  Counterparty    Rate    Principal
Amount
       Maturity*        Value        Value and
Accrued Interest
 
JPC  

BNP Paribas

   1-Month LIBOR plus 0.85%    $ (125,000,000        8/09/22        $ (125,000,000      $ 125,015,998  
JPS  

BNP Paribas

   1-Month LIBOR plus 0.75%      (200,000,000        9/28/21          (200,000,000        200,025,597  
* The Fund may repurchase the reverse repurchase agreement prior to the maturity date and/or counterparty may accelerate maturity upon pre-specified advance notice.

During the current fiscal period, the average daily balance outstanding and weighted average interest rate on the Funds’ reverse repurchase agreements were as follows:

 

     JPC        JPS  

Average daily balance outstanding

  $ 125,000,000 **       $ 200,000,000  

Weighted average interest rate

    2.20        2.09
** For the period August 9, 2017 (initial purchase of reverse repurchase agreements) through January 31, 2018.

The following table presents the reverse repurchase agreements subject to netting agreements and the collateral delivered related to those reverse repurchase agreements.

 

Fund    Counterparty       

Reverse Repurchase

Agreements***

      

Collateral

Pledged to
counterparty****

      

Net

Exposure

 
JPC      BNP Paribas        $ (125,015,998      $ 125,015,998        $  
JPS      BNP Paribas          (200,025,597        200,025,597           
*** Represents gross value and accrued interest for the counterparty as reported in the preceding table.
**** As of the end of the reporting period, the value of the collateral pledged to the counterparty exceeded the value of the reverse repurchase agreements.

9. Inter-Fund Lending

Inter-Fund Borrowing and Lending

The Securities and Exchange Commission (“SEC”) has granted an exemptive order permitting registered open-end and closed-end Nuveen funds to participate in an inter-fund lending facility whereby the Nuveen funds may directly lend to and borrow money from each other for temporary purposes (e.g., to satisfy redemption requests or when a sale of securities “fails,” resulting in an unanticipated cash shortfall) (the “Inter-Fund Program”). The closed-end Nuveen funds, including the Funds covered by this shareholder report, will participate only as lenders, and not as borrowers, in the Inter-Fund Program because such closed-end funds rarely, if ever, need to borrow cash to meet redemptions. The Inter-Fund Program is subject to a number of conditions, including, among other things, the requirements that (1) no fund may borrow or lend money through the Inter-Fund Program unless it receives a more favorable interest rate than is typically available from a bank or other financial institution for a comparable transaction; (2) no fund may borrow on an unsecured basis through the Inter-Fund Program unless the fund’s outstanding borrowings from all sources immediately after the inter-fund borrowing total 10% or less of its total assets; provided that if the borrowing fund has a secured borrowing outstanding from any other lender, including but not limited to another fund, the inter-fund loan must be secured on at least an equal priority basis with at least an equivalent percentage of collateral to loan value; (3) if a fund’s total outstanding borrowings immediately after an inter-fund borrowing would be greater than 10% of its total assets, the fund may borrow through the inter-fund loan on a secured basis only; (4) no fund may lend money if the loan would cause its aggregate outstanding loans through the Inter-Fund Program to exceed 15% of its net assets at the time of the loan; (5) a fund’s inter-fund loans to any one fund shall not exceed 5% of the lending fund’s net assets; (6) the duration of inter-fund loans will be limited to the time required to receive payment for securities sold, but in no event more than seven days; and (7) each inter-fund loan may be called on one business day’s notice by a lending fund and may be repaid on any day by a borrowing fund. In addition, a Nuveen fund may participate in the Inter-Fund Program only if and to the extent that such participation is consistent with the fund’s investment objective and investment policies. The Board is responsible for overseeing the Inter-Fund Program.

 

NUVEEN     75  


Notes to Financial Statements (unaudited) (continued)

 

The limitations detailed above and the other conditions of the SEC exemptive order permitting the Inter-Fund Program are designed to minimize the risks associated with Inter-Fund Program for both the lending fund and the borrowing fund. However, no borrowing or lending activity is without risk. When a fund borrows money from another fund, there is a risk that the loan could be called on one day’s notice or not renewed, in which case the fund may have to borrow from a bank at a higher rate or take other actions to payoff such loan if an inter-fund loan is not available from another fund. Any delay in repayment to a lending fund could result in a lost investment opportunity or additional borrowing costs.

During the current reporting period, none of the Funds have entered into any inter-fund loan activity.

10. New Accounting Pronouncements

FASB Accounting Standards Update (“ASU”) 2017-08 (“ASU 2017-08”) Premium Amortization on Purchased Callable Debt Securities

The FASB has issued ASU 2017-08, which shortens the premium amortization period for purchased non-contingently callable debt securities. ASU 2017-08 specifies that the premium amortization period ends at the earliest call date, for purchased non-contingently callable debt securities. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management is currently evaluating the implications of ASU 2017-08, if any.

FASB ASU 2016-18: Statement of Cash Flows – Restricted Cash (“ASU 2016-18”)

The FASB has issued ASU 2016-18, which will require entities to include the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the beginning and ending cash balances in the Statement of Cash Flows. The guidance will be applied retrospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Management is currently evaluating the implications of ASU 2016-18, if any.

 

  76     NUVEEN


Additional

Fund Information

 

Board of Trustees      
Margo Cook*   Jack B. Evans   William C. Hunter   Albin F. Moschner   John K. Nelson   William J. Schneider
Judith M. Stockdale   Carole E. Stone   Terence J. Toth   Margaret L. Wolff   Robert L. Young  

 

* Interested Board Member.

 

         

Fund Manager

Nuveen Fund Advisors, LLC

333 West Wacker Drive

Chicago, IL 60606

 

Custodian

State Street Bank
& Trust Company
One Lincoln Street

Boston, MA 02111

 

Legal Counsel

Chapman and Cutler LLP

Chicago, IL 60603

 

Independent Registered
Public Accounting Firm

KPMG LLP
200 East

Randolph Street

Chicago, IL 60601

 

Transfer Agent and
Shareholder Services

Computershare Trust

Company, N.A.

250 Royall Street

Canton, MA 02021

(800) 257-8787

 

 

Quarterly Form N-Q Portfolio of Investments Information

Each Fund is required to file its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. You may obtain this information directly from the SEC. Visit the SEC on-line at http://www.sec.gov or in person at the SEC’s Public Reference Room in Washington, D.C. Call the SEC toll-free at (800) SEC-0330 for room hours and operation.

 

 

Nuveen Funds’ Proxy Voting Information

You may obtain (i) information regarding how each fund voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30, without charge, upon request, by calling Nuveen toll-free at (800) 257-8787 or on Nuveen’s website at www.nuveen.com and (ii) a description of the policies and procedures that each fund used to determine how to vote proxies relating to portfolio securities without charge, upon request, by calling Nuveen toll free at (800) 257-8787. You may also obtain this information directly from the SEC. Visit the SEC on-line at http://www.sec.gov.

 

 

CEO Certification Disclosure

Each Fund’s Chief Executive Officer (CEO) has submitted to the New York Stock Exchange (NYSE) the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual. Each Fund has filed with the SEC the certification of its CEO and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act.

 

 

Common Share Repurchases

Each Fund intends to repurchase, through its open market share repurchase program, shares of their own common stock at such times and in such amounts as is deemed advisable. During the period covered by this report, each Fund repurchased shares of its common stock, as shown in the accompanying table. Any future repurchases will be reported to shareholders in the next annual or semi-annual report.

 

     JPC        JPI        JPS       

JPT

 

Common shares repurchased

                                

FINRA BrokerCheck

The Financial Industry Regulatory Authority (FINRA) provides information regarding the disciplinary history of FINRA member firms and associated investment professionals. This information as well as an investor brochure describing FINRA BrokerCheck is available to the public by calling the FINRA BrokerCheck Hotline number at (800) 289-9999 or by visiting www.FINRA.org.

 

 

 

NUVEEN     77  


Glossary of Terms

Used in this Report

 

  Average Annual Total Return: This is a commonly used method to express an investment’s performance over a particular, usually multi-year time period. It expresses the return that would have been necessary each year to equal the investment’s actual cumulative performance (including change in NAV or offer price and reinvested dividends and capital gains distributions, if any) over the time period being considered.

 

  ICE BofAML Contingent Capital Index: An index that tracks the performance of all contingent capital debt publicly issued in the major domestic and Eurobond markets, including investment grade and sub-investment grade issues. Index returns assume reinvestment of distributions, but do not include the effects of any applicable sales charges or management fees.

 

  ICE BofAML Core Plus Fixed Rate Preferred Securities Index: An index that tracks the performance of fixed rate U.S. dollar denominated preferred securities issued in the U.S. domestic market. Index returns do not include the effects of any sales charges or management fees.

 

  ICE BofAML Preferred Securities Fixed Rate Index: An index that tracks the performance of fixed rate U.S. dollar denominated preferred securities issued in the U.S. domestic market. Qualifying securities must be rated investment grade (based on an average of Moody’s, S&P, and Fitch) and must have an investment grade rated country of risk (based on an average of Moody’s, S&P, and Fitch foreign currency long-term sovereign debt ratings). In addition, qualifying securities must be issued as public securities or through a 144A filing, must be issued in $25, $50 or $100 par/liquidation preference increments, must have a fixed coupon or dividend schedule, and must have a minimum amount outstanding of $100 million. The index returns assume reinvestment of dividends, but do not include the effects of any sales charges or management fees.

 

  ICE BofAML U.S. All Capital Securities Index: An index comprised of four sub-indexes that better represent the full breadth of the preferred and hybrid securities market, including investment grade and below investment grade exchange traded $25 par preferreds and investment grade and below investment grade rated $1,000 par capital securities. Index returns assume reinvestment of distributions, but do not reflect any applicable sales charges or management fees.

 

  Contingent Capital Securities (CoCos): CoCos are debt or capital securities of primarily non-U.S. issuers with loss absorption contingency mechanisms built into the terms of the security, for example a mandatory conversion into common stock of the issuer, or a principal write-down, which if triggered would likely cause the CoCo investment to lose value. Loss absorption mechanisms would become effective upon the occurrence of a specified contingency event, or at the discretion of a regulatory body. Specified contingency events, as identified in the CoCo’s governing documents, usually reference a decline in the issuer’s capital below a specified threshold level, and/or certain regulatory events. A loss absorption contingency event for CoCos would likely be the result of, or related to, the deterioration of the issuer’s financial condition and/or its status as a going concern. In such a case, with respect to CoCos that provide for conversion into common stock upon the occurrence of the contingency event, the market price of the issuer’s common stock received by the Acquiring Fund will have likely declined, perhaps substantially, and may continue to decline after conversion. CoCos rated below investment grade should be considered high yield securities, or “junk,” but often are issued by entities whose more senior securities are rated investment grade. CoCos are a relatively new type of security; and there is a risk that CoCo security issuers may suffer the sort of future financial distress that could materially increase the likelihood (or the market’s perception of the likelihood) that an automatic write-down or conversion event on those issuers’ CoCos will occur. Additionally, the trading behavior of a given issuer’s CoCo may be strongly impacted by the trading behavior of other issuers’ CoCos, such that negative information from an unrelated CoCo security may cause a decline in value of one or more CoCos held by the Fund. Accordingly, the trading behavior of CoCos may not follow the trading behavior of other types of debt and preferred securities. Despite these concerns, the prospective reward vs. risk characteristics of at least certain CoCos may be very attractive relative to other fixed-income alternatives.

 

  78     NUVEEN


 

  Duration: Duration is a measure of the expected period over which a bond’s principal and interest will be paid, and consequently is a measure of the sensitivity of a bond’s or bond fund’s value to changes when market interest rates change. Generally, the longer a bond’s or fund’s duration, the more the price of the bond or fund will change as interest rates change.

 

  Effective Leverage: Effective leverage is a fund’s effective economic leverage, and includes both regulatory leverage (see below) and the leverage effects of certain derivative investments in the fund’s portfolio.

 

  JPC Blended Benchmark (New Blended Benchmark): A blended return consisting of: 1) 50% ICE BofAML Fixed Rate Preferred Securities Index, which tracks the performance of fixed rate U.S. dollar denominated preferred securities issued in the U.S. domestic market; 2) 30% ICE BofAML U.S. All Capital Securities Index (IOCS), a subset of the ICE BofAML U.S. Corporate Index including all fixed to- floating rate, perpetual callable and capital securities, which better represents the full breadth of the preferred and hybrid securities market, including investment grade and below investment grade exchange traded $25 par preferreds and investment grade and below investment grade rated $1,000 par capital securities; and 3) 20% ICE BofAML Contingent Capital Securities USD Hedged Index (CoCo), which tracks the performance of all contingent capital debt publicly issued in the major domestic and Eurobond markets, including investment grade and sub-investment grade issues. Index returns assume reinvestment of distributions, but do not include the effects of any applicable sales charges or management fees.

 

  JPI Blended Benchmark Index: The JPI Blended Benchmark is a blended return consisting of: 1) 60% ICE BofAML U.S. All Capital Securities Index (IOCS), a subset of the ICE BofAML U.S. Corporate Index including all fixed to- floating rate, perpetual callable and capital securities, which better represents the full breadth of the preferred and hybrid securities market, including investment grade and below investment grade exchange traded $25 par preferreds and investment grade and below investment grade rated $1,000 par capital securities; and 2) 40% ICE BofAML Contingent Capital Index, which tracks the performance of all contingent capital debt publicly issued in the major domestic and Eurobond markets, including investment grade and sub-investment grade issues. Benchmark returns assume reinvestment of distributions, but do not include the effects of any sales charges or management fees.

 

  JPS Blended Benchmark (New Blended Benchmark): A blended return consisting of: 1) 40% of the ICE BofAML Contingent Capital Securities USD Hedged Index (CoCo), which tracks the performance of all contingent capital debt publicly issued in the major domestic and Eurobond markets, including investment grade and sub-investment-grade issues; and 2) 60% of the ICE BofAML U.S. All Capital Securities Index (IOCS), a subset of the ICE BofAML U.S. Corporate Index including all fixed-to-floating rate, perpetual callable and capital securities, which better represents the full breadth of the preferred and hybrid securities market, including investment grade and below investment grade exchange traded $25 par preferreds and investment grade and below investment grade rated $1,000 par capital securities. Index returns do not include the effects of any sales charges or management fees.

 

  Leverage: Leverage is created whenever a fund has investment exposure (both reward and/or risk) equivalent to more than 100% of the investment capital.

 

  Net Asset Value (NAV) Per Share: A fund’s Net Assets is equal to its total assets (securities, cash, accrued earnings and receivables) less its total liabilities. NAV per share is equal to the fund’s Net Assets divided by its number of shares outstanding.

 

  Option-adjusted spread (OAS): An option-adjusted spread is a more meaningful spread statistic for mortgage-backed securities, which experience cash flows over multiple time periods, and for which the borrower has the option to re-pay principal at any time. OAS is based on modeled forecasts for voluntary repayments, as well as discounted cash flows, to arrive at a market-weighted spread over a known Treasury benchmark.

 

  Regulatory Leverage: Regulatory leverage consists of preferred shares issued by or borrowings of a fund. Both of these are part of a fund’s capital structure. Regulatory leverage is subject to asset coverage limits set forth in the Investment Company Act of 1940.

 

NUVEEN     79  


Glossary of Terms Used in this Report (continued)

 

 

  Yield-to-Worst (YTW): Represents the lowest potential yield that an investor would receive on a bond if the issuer does not default. The yield to worst is calculated by making worst-case scenario assumptions on the issue by calculating the returns that would be received if provisions, including prepayment, call or sinking fund, are used by the issuer. The YTW is used to evaluate the worst-case scenario for yield to help investors manage their risk and exposures.

 

  80     NUVEEN


Reinvest Automatically,

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.

 

 

NUVEEN     81  


Notes

 

 

  82     NUVEEN


Notes

 

 

NUVEEN     83  


LOGO

 

          

 

           
  Nuveen:   
     Serving Investors for Generations      
    

 

     Since 1898, financial advisors and their clients have relied on Nuveen to provide dependable investment solutions through continued adherence to proven, long-term investing principles. Today, we offer a range of high quality solutions designed to be integral components of a well-diversified core portfolio.   
       

 

       

Focused on meeting investor needs.

 

Nuveen is the investment manager of TIAA. We have grown into one of the world’s premier global asset managers, with specialist knowledge across all major asset classes and particular strength in solutions that provide income for investors and that draw on our expertise in alternatives and responsible investing. Nuveen is driven not only by the independent investment processes across the firm, but also the insights, risk management, analytics and other tools and resources that a truly world-class platform provides. As a global asset manager, our mission is to work in partnership with our clients to create solutions which help them secure their financial future.

  
    

 

        
       

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

  

 

                 
  Nuveen Securities, LLC, member FINRA and SIPC | 333 West Wacker Drive Chicago, IL 60606 | www.nuveen.com   

 

ESA-B-0118D        445042-INV-B-03/19


Item 2. Code of Ethics.

Not applicable to this filing.

Item 3. Audit Committee Financial Expert.

Not applicable to this filing.

Item 4. Principal Accountant Fees and Services.

Not applicable to this filing.

Item 5. Audit Committee of Listed Registrants.

Not applicable to this filing.

Item 6. Schedule of Investments.

(a) See Portfolio of Investments in Item 1.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to this filing.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to this filing.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board implemented after the registrant last provided disclosure in response to this item.

Item 11. Controls and Procedures.

 

(a) The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

File the exhibits listed below as part of this Form.

(a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable to this filing.

(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: See EX-99.CERT attached hereto.

(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons: Not applicable.

(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2 (b) under the 1940 Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an Exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registration specifically incorporates it by reference: See EX-99.906 CERT attached hereto.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Nuveen Preferred and Income Securities Fund

 

By (Signature and Title)   

/s/ Gifford R. Zimmerman

  
   Gifford R. Zimmerman   
   Vice President and Secretary   

Date: April 5, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)   

/s/ Cedric H. Antosiewicz

  
   Cedric H. Antosiewicz   
   Chief Administrative Officer   
   (principal executive officer)   

Date: April 5, 2018

 

By (Signature and Title)   

/s/ Stephen D. Foy

  
   Stephen D. Foy   
   Vice President and Controller   
   (principal financial officer)   

Date: April 5, 2018