Spectrum Asset Management, an affiliate of Principal Global Investors, announced Wednesday it will manage a new tax-advantaged floating rate fund for Nuveen Investments. The Nuveen Tax-Advantaged Floating Rate Fund, a closed-end, exchange-traded fund, raised more than $300 million in the initial common share public offering and began trading on the New York Stock Exchange March 29 under the ticker JFP.
The fund is invested in adjustable rate preferred securities issued by small- to mid-sized banking companies. These securities are eligible to pay dividends which have tax advantages.
"This is the first such fund to be launched in the United States and represents a new and expanding part of the preferred market," said Mark Lieb, Spectrum's founder and executive director. "In addition to providing current income, the dividends paid by the fund's floating-rate preferred securities may provide a hedge against rising short-term interest rates."