Fund manager Paul Brennan said the limited-term fund differs from most Nuveen funds by investing in maturities of between one and seven years, compared with an average of between 15 and 30 years. Also, the fund selects bonds with a triple-B rating or lower.
Brennan said lower-rated, shorter-term bonds often are overlooked by investors, creating “some really good opportunities to pick up some value in the lower-rated category. And we're able to, over time, provide extra yield to the fund.”
The $719 million fund generated total returns of 3.9% last year, compared to 3.4% returns for the benchmark Lehman Brothers Municipal Index.
Brennan’s fund has bucked the downward bond trend by investing in health care and in tobacco.
"The fact that baby boomers are now entering their retirement years means there's going to be a lot of demand for facilities going forward," he said.
States have securitized the payments the tobacco industry makes for claim settlements, and the yield on these securities has helped boost the fund’s returns.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
