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:    July 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 policymaking roles.

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


ITEM 1. REPORTS TO STOCKHOLDERS.


LOGO

 

Closed-End Funds

 

31 July 2018

 

Nuveen Closed-End Funds

 

JPC    Nuveen Preferred & Income Opportunities Fund
JPI    Nuveen Preferred and Income Term Fund
JPS    Nuveen Preferred & Income Securities Fund
JPT    Nuveen Preferred and Income 2022 Term Fund

 

Annual Report


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LOGO


Table of Contents

 

Chairman’s Letter to Shareholders

     4  

Portfolio Managers’ Comments

     5  

Fund Leverage

     15  

Common Share Information

     17  

Risk Considerations

     19  

Performance Overview and Holding Summaries

     22  

Shareholder Meeting Report

     30  

Report of Independent Registered Public Accounting Firm

     31  

Portfolios of Investments

     32  

Statement of Assets and Liabilities

     55  

Statement of Operations

     56  

Statement of Changes in Net Assets

     57  

Statement of Cash Flows

     59  

Financial Highlights

     60  

Notes to Financial Statements

     64  

Additional Fund Information

     79  

Glossary of Terms Used in this Report

     80  

Reinvest Automatically, Easily and Conveniently

     82  

Annual Investment Management Agreement Approval Process

     83  

Board Members & Officers

     91  

 

3


Chairman’s Letter to Shareholders

 

LOGO

Dear Shareholders,

I am honored to serve as the new independent chairman of the Nuveen Fund Board, effective July 1, 2018. I’d like to gratefully acknowledge the stewardship of my predecessor William J. Schneider and, on behalf of my fellow Board members, reinforce our commitment to the legacy of strong, independent oversight of your Funds.

The increase in market turbulence this year reflects greater uncertainty among investors. The global economic outlook is less clear cut than it was in 2017. U.S. growth is again decoupling from that of the rest of the world, and the U.S. dollar and interest rates have risen in response. Trade war rhetoric and the imposition of tariffs between the U.S. and its major trading partners has recently dampened business sentiment and could pose a risk to growth expectations going forward. Downside risks for some emerging markets have increased. A host of other geopolitical concerns, including the ongoing Brexit and North American Free Trade Agreement negotiations, North Korea relations and rising populism around the world, remain on the horizon.

Despite these risks, global growth remains intact, albeit at a slower pace, providing support to corporate earnings. Fiscal stimulus, an easing regulatory environment and robust consumer spending recently helped boost the U.S. economy’s momentum. Growth estimates for Europe, the U.K. and Japan pointed to a rebound in their economies during the second quarter. Subdued inflation pressures have kept central bank policy accommodative, even as Europe moves closer to winding down its monetary stimulus and the Federal Reserve remains on a moderate tightening course.

Headlines and political noise will continue to obscure underlying fundamentals at times and cause temporary bouts of volatility. We encourage you to work with your financial advisor to evaluate your goals, timeline and risk tolerance if short-term market fluctuations are a concern. 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

Terence J. Toth

Chairman of the Board

September 24, 2018

 

 

4


Portfolio Managers’ Comments

 

Nuveen Preferred & Income Opportunities Fund (JPC)

Nuveen Preferred and Income Term Fund (JPI)

Nuveen Preferred & 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 & 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. Douglas Baker, CFA, and Brenda Langenfeld, CFA, have served as the Fund’s portfolio managers since its inception. The Nuveen Preferred & Income Securities Fund (JPS) is sub-advised by a team of specialists at Spectrum Asset Management (Spectrum), 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. 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.

 

 

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.

 

5


Portfolio Managers’ Comments (continued)

 

What factors affected the U.S. economy and financial markets during the twelve-month reporting period ended July 31, 2018?

After maintaining a moderate pace of growth for most of the twelve-month reporting period, the U.S. economy accelerated in the second quarter of 2018. In the April to June period, economic stimulus from tax cuts and deregulation helped lift the economy to its fastest pace since 2014. The “second” estimate by the Bureau of Economic Analysis reported U.S. gross domestic product (GDP) grew at an annualized rate of 4.2% in the second quarter, up from 2.2% in the first quarter, 2.3% in the fourth quarter of 2017 and 2.8% in the third quarter of 2017. GDP is the value of goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes. The boost in economic activity during the second quarter of 2018 was attributed to robust spending by consumers, businesses and the government, as well as a temporary increase in exports, as farmers rushed soybean shipments ahead of China’s retaliatory tariffs.

Consumer spending, the largest driver of the economy, remained well supported by low unemployment, wage gains and, in the second quarter, tax cuts. As reported by the Bureau of Labor Statistics, the unemployment rate fell to 3.9% in July 2018 from 4.3% in July 2017 and job gains averaged around 200,000 per month for the past twelve months. The Consumer Price Index (CPI) increased 2.9% over the twelve-month reporting period ended July 31, 2018 on a seasonally adjusted basis, as reported by the Bureau of Labor Statistics.

Low mortgage rates and low inventory continued to drive home prices higher. Although mortgage rates have started to nudge higher, they remained relatively low by historical standards. The S&P CoreLogic Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, rose 6.2% in June 2018 (most recent data available at the time this report was prepared). The 10-City and 20-City Composites reported year-over-year increases of 6.0% and 6.3%, respectively.

With the U.S. economy delivering a sustainable growth rate and employment strengthening, the Fed’s policy making committee continued to incrementally raise its main benchmark interest rate. The most recent increase, in June 2018, was the seventh rate hike since December 2015. Fed Chair Janet Yellen’s term expired in February 2018, and incoming Chairman Jerome Powell indicated he would likely maintain the Fed’s gradual pace of interest rate hikes. At the June meeting, the Fed increased its projection to four interest rate increases in 2018, from three increases projected at the March meeting, indicating its confidence in the economy’s health. In line with expectations, the Fed left rates unchanged at its July meeting and continued to signal another increase in September. Additionally, the Fed continued reducing its balance sheet by allowing a small amount of maturing Treasury and mortgage securities to roll off without reinvestment. The market expects the pace to remain moderate and predictable, with minimal market disruption.

Geopolitical news remained a prominent market driver. Protectionist rhetoric had been garnering attention across Europe, as anti-European Union (EU) sentiment featured prominently (although did not win a majority) in the Dutch, French and German elections in 2017. Italy’s 2018 elections resulted in a hung parliament, and several months of negotiations resulted in a populist, euro-skeptic coalition government. The U.S. moved forward with tariffs on imported goods from China, as well as on steel and aluminum from Canada, Mexico and Europe. These countries announced retaliatory measures in kind, intensifying concerns about a trade war, although the U.S. and the Europe Union announced in July they would refrain from further tariffs while they negotiate trade terms. Meanwhile, in March the U.K. and EU agreed in principle to the Brexit transition terms, but political instability in the U.K. in July has clouded the outlook. The U.S. Treasury issued additional sanctions on Russia in April, and re-imposed sanctions on Iran after President Trump withdrew from the 2015 nuclear agreement. The threat of a nuclear North Korea eased somewhat as the leaders of South Korea and North Korea met during April and jointly announced a commitment toward peace, while the U.S.-North Korea summit yielded an agreement with few additional details.

Credit spreads tightened during the first half of the reporting period as equity prices continued to rise and volatility in equity markets continued to hit new lows. At the end of January, credit spreads abruptly widened as fears of four interest

 

6


 

rate increases by the Fed began to get priced into the bond market. Equities corrected and the sell-off into February and March impelled spreads in capital securities to widen as volatility normalized to more historic averages. The combination of widening spreads and rising U.S. Treasury bond yields negatively impacted prices, in particular, for contingent capital securities or CoCos which peaked in January 2018.

For the twelve-month reporting period, the Blended Benchmark Index, which represents the combined preferred securities and CoCos universe, returned 1.81%. While all broad sub-categories within the Blended Benchmark Index posted positive returns during the reporting period, investment performance was not dispersed evenly across each segment. For example, $25 par securities, securities with fixed rate coupons, and CoCo securities all posted returns in excess of the average return for the Blended Benchmark Index. However, securities with coupons that have reset features, $1,000 par securities, and non-CoCo securities while indeed posting positive returns, all produced returns below the average for the Blended Benchmark Index. Non-U.S.-domiciled issuers outperformed U.S.-domiciled issuers over the twelve month reporting period ended July 31, 2018.

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

Nuveen Preferred & 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 one-year, five-year and ten-year periods ended July 31, 2018. For the twelve month reporting period ended July 31, 2018, the Fund’s common shares at net asset value (NAV) underperformed the ICE BofAML U.S. All Capital Securities Index and the JPC Blended Benchmark.

JPC has 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.

Nuveen Asset Management

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 the strong credit fundamentals across the largest sectors within the issuer base, the category’s healthy yield level, and inefficiencies that often arise 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 banks, insurance companies and utilities, 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 market and the $1,000 par market. Periods of volatility may drive notable differences in valuations

 

7


Portfolio Managers’ Comments (continued)

 

between these two markets, as will periods where valuations trend in one direction for an extended period of time. Divergence in valuations is often related to differences in how retail and institutional investors measure 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 the $25 par market and $1,000 par market. Technical factors played a significant factor in absolute and relative performance during the most recent reporting period.

For the twelve-month reporting period, the Blended Benchmark Index for the sleeve managed by NAM, which represents the combined preferred securities and CoCos markets, returned 1.81%. This figure 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. While all broad sub-categories within the Blended Benchmark Index posted positive returns during the reporting period, investment performance was not dispersed evenly across segments. For example, $25 par securities, securities with fixed rate coupons, and CoCo securities all posted returns in excess of the average return for the Blended Benchmark Index. However, securities with coupons that have reset features, $1,000 par securities, and non-CoCo securities while indeed posting positive returns, all produced returns below the average for the Blended Benchmark Index.

Taking a closer look at asset class level performance for the annual reporting period ended July 31, 2018, the positive absolute return was primarily the result of the generous yield from the combined preferred securities and CoCos markets. To the contrary, negative price return during the reporting period did detract from overall performance. On average, prices were lower across the investible universe due to a combination of wider OAS and higher interest rates. OAS for the Blended Benchmark Index pushed wider during the reporting period by slightly over 50 basis points, while the U.S. 10-year Treasury rate increased by 66 basis points. However, with respect to the Blended Benchmark Index, OAS moved disproportionately wider for the preferred securities segment or non-CoCos segment of our universe. We believe that the material move higher in domestic interest rates during the reporting period, the significant drop in the U.S. dollar during the first few months of 2018, and the increased cost of hedging from USD to local currency all weighed on foreign appetite for domestic fixed income paper, including preferred securities. This theme of wider credit spreads however, was more broad-based in nature across most of the U.S. fixed income market versus being specific to NAM’s investible universe. We at NAM were still surprised that OAS moved as wide as it did for the overall Blended Benchmark Index, and especially so for the preferred securities segment of the market where the U.S. bank sector is the largest sector. U.S. banks generally reported better than expected earnings during the entire twelve month reporting period. In addition, all U.S. banks subject to the annual exams passed the 2018 DFAST and CCAR stress tests, which incorporated arguably the toughest adverse scenario assumptions to date. Finally, during the reporting period, U.S. banks redeemed several billion dollars more in preferred securities paper than they issued. Given this combination of strong fundamentals and a supportive supply technical within the U.S. bank sector, NAM would have expected OAS for the preferred securities segment of our universe to have outperformed OAS for the CoCos segment of the market.

NAM incorporated several active themes relative to the Blended Benchmark Index during the reporting period, including 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 underweight to CoCos detracted modestly from performance relative to the Blended Benchmark Index, as CoCo securities outperformed on average during the reporting period. As of July 31, 2018, the Fund had an allocation of approximately 30% to CoCos, 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 during the reporting period. While the average OAS for the CoCos segment of the Blended Benchmark did indeed move wider, it only increased by 8 basis points during the reporting period, well below the 82 basis point move wider in the preferred securities segment of the same index. The relative performance was even more perplexing when

 

8


 

one considers the relatively supportive fundamental and technical backdrop of the preferred securities market as discussed earlier, coupled with previously mentioned geopolitical headlines relating to Brexit and the Italian geopolitical landscape, which should have weighed disproportionately on the CoCos segment of the market.

Within the investable universe, $25 par securities on average outperformed $1,000 par securities. Given the outperformance of the $25 par preferred retail side of the market during the reporting period, NAM’s underweight to those structures detracted from 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, with respect to relative value, 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. OAS for $25 par preferred securities has been driven lower by retail investors’ disproportionate bias for income-generating investment solutions, exacerbated by a prolonged period of low interest rates. Within the preferred securities universe, the $25 par preferred side of the market aligns best with this retail demand given the small denomination, and retail investors’ ease of sourcing these securities as most are exchange-traded. Compounding the situation was heavy redemption activity of $25 par preferred securities, which resulted in scarcity of supply. NAM estimates that between the beginning of 2018 and the end of the reporting period, the amount of outstanding $25 par preferred securities decreased by nearly $12 billion, while during that same time period, net new issue flow on the $1,000 par preferred side of the market was slightly positive. This dearth of $25 par preferred supply created a supply technical that disproportionately supported valuations of $25 par preferred securities versus $1,000 par preferred securities. In our opinion, this was the primary factor driving relative outperformance of $25 par preferred securities versus $1,000 par preferred securities.

Second, with respect to managing interest rate risk, NAM’s underweight to the $25 par preferred securities was due to NAM’s desire for 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 preferred side of the market and help to mitigate duration and duration extension risk during a rising interest rate environment. Duration extension can be a significant risk for callable securities with fixed-rate coupons. As of July 31, 2018, the Fund had about 88% of its assets invested in securities that have coupons with reset features, compared to approximately 75% within the Blended Benchmark Index.

Fixed rate coupon structures outperformed securities that had coupons with reset features. In NAM’s opinion, outperformance of the fixed rate coupon structures was an ancillary effect from the outperformance of $25 par preferred securities, as a vast majority of that universe is indeed comprised of fixed rate coupon structures.

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 and high yield bond holdings contributed to performance. Several sectors contributed to the Fund’s performance, in particular NWQ’s holdings in the industrial conglomerates, diversified financial services and utilities, while banking and insurance were the largest detractor.

Several of NWQ’s holdings performed well during the reporting period. NextEra Energy Inc. convertible preferred stock, buoyed by a confluence of increasingly positive fundamental market forces including 1) capital discipline among

 

9


Portfolio Managers’ Comments (continued)

 

producers, 2) declining inventories, 3) strong demand, and 4) an agreement for a modest supply increase by the Organization of the Petroleum Exporting Countries (OPEC) required to perhaps offset renewed Iran sanctions and prevent a further spike in oil prices. Also contributing to performance was Ladenburg Thalmann preferred stock. The company reported first quarter 2018 results which exhibited robust growth in revenues, profitability and client assets. Favorable market conditions and an increasing interest rate environment, coupled with solid execution by their management team, contributed strong performance. 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.

Several positions detracted from performance including the preferred stock of Maiden Holdings Limited. The company reported 2017 annual results that were worse than expected. The results were not well received and the holdings sold off. Also detracting from performance was TravelCenters of America high yield bond position. TravelCenters of America is the largest operator of truck stops and travel centers in the United States. The company reported missed earnings due to soft gas demand from consumers, and lower fuel gross margins due to competitive pricing activity. NWQ has sold its holdings of TravelCenters of America. Lastly, Dish DBS Corporation 7.750% 7/01/2026 senior note was also a bottom performer during the reporting period. The company reported weaker earnings before interest, tax, depreciation and amortization (EBITDA) versus expectations for their fourth quarter ending December 31, 2017 and continues to be challenged in its broadcast subscription satellite TV services. Additionally, the company will have to start to spend on a build out of a wireless network in order to retain its wireless spectrum licenses. Both of these factors weighed on the credit during the first quarter of 2018. NWQ remains constructive on the credit going forward largely as a result of the unrealized value of its wireless spectrum. NWQ anticipates they will do a value accretive transaction within the medium-term. Currently, NWQ believes the wireless spectrum’s value is well in excess of the amount of debt outstanding.

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 one-year, five-year and since inception periods ended July 31, 2018. For the twelve-month reporting period ended July 31, 2018, the Fund’s common shares at net asset value (NAV) underperformed 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.

 

 

10


 

For the twelve-month reporting period, the Blended Benchmark Index, which represents the combined preferred securities and CoCos markets, returned 1.81%. This figure 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. While all broad sub-categories within the Blended Benchmark Index posted positive returns during the reporting period, investment performance was not dispersed evenly across each segment. For example, $25 par securities, securities with fixed rate coupons, and CoCo securities all posted returns in excess of the average return for the Blended Benchmark Index. However, securities with coupons that have reset features, $1,000 par securities, and non-CoCo securities while indeed posting positive returns, all produced returns below the average for the Blended Benchmark Index.

Taking a closer look at asset class level performance for the twelve month reporting period ended July 31, 2018, the positive return primarily was due to the generous yield of the combined preferred securities and CoCos markets, while negative price return during the reporting period detracted from overall performance. On average, prices were lower across the investible universe due to a combination of wider OAS and higher interest rates. OAS for the Blended Benchmark Index pushed wider during the reporting period by slightly over 50 basis points, while the U.S. 10-year Treasury rate increased by approximately 66 basis points. However, with respect to the Blended Benchmark Index, OAS moved disproportionately wider on average for preferred security structures versus CoCo securities. NAM believes that the material move higher in domestic interest rates during the reporting period, the significant drop in the U.S. dollar during the first few months of 2018, and the increased cost of hedging from USD to local currency all weighed on foreign appetite for domestic fixed income paper. This theme of wider credit spreads; however, was more broad-based across most of the U.S. fixed income market versus being specific to NAM’s investible universe. We at NAM were still surprised that OAS moved as wide as it did for the overall Blended Benchmark Index, and especially so for the preferred securities segment of the market where the U.S. bank sector is the largest sector. U.S. banks generally reported better than expected earnings during the entire reporting period. In addition, all U.S. banks subject to the annual exams passed the 2018 DFAST and CCAR stress tests, which incorporated arguably the toughest adverse scenario assumptions to date. Finally, U.S. banks redeemed several billion dollars more preferred securities paper than they issued. Given this combination of strong fundamentals and a supportive supply technical within the U.S. bank sector, NAM would have expected OAS for the preferred securities segment to have outperformed OAS for the CoCos segment.

NAM incorporated several active themes relative to the Blended Benchmark Index during the reporting period, including an overweight 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 underweight to CoCos detracted modestly from performance relative to the Blended Benchmark Index, as CoCos outperformed on average over the twelve month reporting period. As of July 31, 2018, the Fund had an allocation of approximately 30% to CoCos, 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 during the reporting period. While the average OAS for the CoCos segment of the Blended Benchmark Index did indeed move wider, it increased by only 8 basis points between the beginning and the end of the reporting period, well below the 82 basis point move wider within the preferred securities segment of the same index. The relative performance was even more perplexing when one considers the relatively supportive fundamental and technical backdrop of the domestic preferred securities market as discussed earlier, coupled with previously mentioned geopolitical headlines relating to Brexit and the Italian political landscape, which should have disproportionately weighed on the CoCos segment of the market.

Within the investable universe, $25 par securities on average outperformed $1,000 par securities. Given the outperformance of the $25 par preferred retail side of the market during the reporting period, NAM’s underweight to that segment detracted to the Fund’s relative performance. As has been the case for several quarters, NAM maintained an

 

11


Portfolio Managers’ Comments (continued)

 

overweight to $1,000 par securities for two primary reasons, relative value and interest rate risk management. First, with respect to relative value, 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. OAS for $25 par preferred securities has been driven lower by retail investors’ disproportionate bias for income-generating investment solutions, exacerbated by a prolonged period of low interest rates. Within the preferred securities universe, the $25 par preferred side of the market is best positioned to align with retail demand given the small denomination, and the ease of sourcing these securities as most are exchange-traded. Compounding the situation during the reporting period was heavy net redemption activity of $25 par preferred securities. NAM estimates that between the beginning to 2018 and the end of the reporting period, the amount of outstanding $25 par preferred securities decreased by nearly $12 billion, while during that same time period, net new issue flow on the $1,000 par preferred side of the market was slightly positive. This dearth of $25 par preferred supply created a supply technical that disproportionately supported valuations of $25 par preferred securities versus $1,000 par preferred securities and was the primary factor for the relative outperformance of the $25 par preferred securities versus the $1,000 par preferred securities.

Second, with respect to interest rate risk, the underweight to the $25 par preferred securities also was due to our desire for 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 preferred side of the market and help to mitigate duration and duration extension risk during a rising interest rate environment. Duration extension can be a significant risk for callable securities with fixed-rate coupons. As of July 31, 2018, the Fund had about 88% of its assets invested in securities that have coupons with reset features, compared to approximately 75% within the Blended Benchmark Index.

Contrary to expectations given rising interest rates during the reporting period, fixed rate coupon structures outperformed securities that had coupons with reset features. In our opinion, this really was an ancillary effect from the outperformance of $25 par preferred securities, of which a vast majority of that universe is comprised of fixed rate coupon structures.

Nuveen Preferred & 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 one-year, five-year and ten-year periods ended July 31, 2018. For the twelve-month reporting period ended July 31, 2018, the Fund’s common shares at net asset value (NAV) underperformed 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.

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. CoCos payments are non-cumulative, subject to payment limitations and may not be paid in priority to common stock dividends (i.e. they are pari passu to common stock dividends); and can be

 

12


 

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 70.1% of the Fund (including some cash) and the CoCos segment, represented by the ICE BofAML Contingent Capital Index comprises 29.1% of the Fund.

During the reporting period, Spectrum’s strategy included an orientation away from fixed-for-life coupon structures in favor of adjustable type coupons that can grow income and protect capital if interest rates rise. The fixed-for-life concentration was reduced by 2% during the reporting period to 13.7% of the Fund. Adjustable type coupons comprised 84% of the Fund and are split between fixed-to-floating, fixed-to-variable and floating rate coupons.

Spectrum increased the Fund’s concentration to the institutional preferred stock sector, which pays a fixed-to-floating type coupon. This sector contributed to performance. Spectrum also increased the Fund’s concentration to contingent convertible capital securities, which pay a fixed-to-variable rate coupon. This also contributed to performance. Individual holdings that contributed to performance included Wells Fargo floating rate preferred stock and JP Morgan floating rate preferred stock.

Individual holdings that detracted from performance included General Electric Capital Corporation 5% preferred stock, SocGen 8% contingent capital security and MetLife Capital Trust IV 9.25% hybrid preferred securities.

The modified duration of the Fund’s portfolio maintained a narrow and predictable range of 4.84 years at the beginning of the reporting period to 4.80 years by the end of the reporting period as the U.S. Treasury five-year yield rose by 105 basis points.

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 one-year and since inception periods ended July 31, 2018. For the twelve-month reporting period ended July 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.

 

 

13


Portfolio Managers’ Comments (continued)

 

Within JPT, NAM incorporated several 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 of the $25 par preferred side of the market during the reporting period, NAM’s overweight to $1,000 par preferred structures detracted from 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, from a relative value perspective, 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. OAS for $25 par preferred securities has been driven lower by retail investors’ disproportionate bias for income-generating investment solutions, exacerbated by a prolonged period of low interest rates. Within the preferred securities universe, the $25 par preferred side of the market is best positioned to meet this retail demand given the small denomination, and the ease of sourcing these securities as most are exchange-traded. In addition, recent heavy redemption of $25 par preferred securities has created a supply technical that disproportionately supports valuations of $25 par preferred securities versus $1,000 par preferred securities. From the beginning of 2018 through the end of the reporting period, NAM estimates that the amount of $25 par preferred securities outstanding decreased by nearly $12 billion, while net new issue flow on the $1,000 par side of the market was slightly positive during that same seven month window.

Second, with respect to interest rate risk, NAM’s 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 can be a significant risk for callable securities with fixed-rate coupons.

As of July 31, 2018, the Fund had about 84% of its assets invested in securities that have coupons with reset features, compared to approximately 61% within the Blended Benchmark Index. Contrary to expectations given rising interest rates during the reporting period, fixed rate coupon structures outperformed securities that had coupons with reset features. In NAM’s opinion, this was an ancillary effect from the outperformance of $25 par preferred securities, as a vast majority of that universe is comprised of fixed rate coupon structures.

JPT maintained short interest rate futures during the reporting period to manage the Fund’s overall interest rate sensitivity. These interest rate futures had a positive effect to overall Fund performance during the reporting period.

 

14


Fund Leverage

 

IMPACT OF THE FUNDS’ LEVERAGE STRATEGIES ON PERFORMANCE

One important factor impacting the returns of the Funds’ common shares relative to their comparative benchmarks was the Funds’ use of leverage through 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, particularly in the recent market environment where short-term market rates are at or near historical lows, meaning that the short-term rates the Fund has been paying on its leveraging instruments in recent years have been much lower than the interest the Fund has been earning on its portfolio securities that it has bought with the proceeds of that leverage.

However, use of leverage can expose Fund common shares to additional price volatility. When a Fund uses leverage, the Fund common shares will experience a greater increase in their net asset value if the securities acquired through the use of leverage increase in value, but will also experience a correspondingly larger decline in their net asset value if the securities acquired through leverage decline in value, which will make the shares’ net asset value more volatile, and total return performance more variable, over time.

In addition, common share income in levered funds will typically decrease in comparison to unlevered funds when short-term interest rates increase and increase when short-term interest rates decrease. Over the last few quarters, short-term interest rates have indeed increased from their extended lows after the 2007-09 financial crisis. This increase has reduced common share net income, and also reduced potential for long-term total returns. Nevertheless, the ability to effectively borrow at current short-term rates is still resulting in enhanced common share income, and management believes that the advantages of continuation of leverage outweigh the associated increase in risk and volatility described above.

The Funds’ use of leverage had a positive impact on performance during this reporting period.

JPC, JPI, JPS and JPT 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 had a negligible impact to overall Fund performance.

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

 

     JPC        JPI        JPS        JPT  

Effective Leverage*

    34.87        28.84        34.52        20.66

Regulatory Leverage*

    29.39        28.84        29.89        20.66
*

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.

 

15


Fund Leverage (continued)

 

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     July 31, 2018     Average Balance
Outstanding
           Draws     Paydowns     September 27, 2018  

JPC

  $ 540,000,000     $     —     $ (103,000,000   $ 437,000,000   $ 439,257,534             $     —     $     —     $ 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     July 31, 2018     Average Balance
Outstanding
           Purchases     Sales     September 27, 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  
**

For the period August 9, 2017 (initial purchase of reverse repurchase agreements) through July 31, 2018.

 

16


Common Share Information

 

COMMON SHARE DISTRIBUTION INFORMATION

The following information regarding the Funds’ distributions is current as of July 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

    0.0650          0.1415          0.0620          0.1275  

February

    0.0650          0.1415          0.0620          0.1275  

March

    0.0650          0.1415          0.0620          0.1275  

April

    0.0650          0.1415          0.0620          0.1275  

May

    0.0650          0.1415          0.0620          0.1275  

June

    0.0610          0.1355          0.0560          0.1185  

July 2018

    0.0610          0.1355          0.0560          0.1185  

Total Distributions

  $ 0.7720        $ 1.6860        $ 0.7320        $ 1.5120  
                                          

Current Distribution Rate*

    7.75        7.03        7.52        6.14
*

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 July 31, 2018, JPS and JPT had positive UNII balances while JPC and JPI had zero UNII balances 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 JPS and JPT Funds during the current reporting period, were paid from net investment income. If a portion of the Funds’ monthly distributions are sourced from or comprised of elements other than net investment income, including capital gains and/or a return of capital, shareholders will be notified of those sources. 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.

 

17


Common Share Information (continued)

 

JPC and JPI seek to pay regular monthly distributions at a level rate that reflect past and projected net income of the Funds. The Funds may own certain investments which recognize income for financial reporting in a matter that is different than the tax recognition. During the current fiscal year, the Funds owned certain investments which accrued income for financial reporting purposes but was not recognized as current income for tax purposes. Although the Funds reduced distributions during the year, each Fund’s distribution amount over the entire fiscal year exceeded the actual amount of net income for tax purposes. As a result, a portion of each Fund’s fiscal year distributions have been deemed to be a return of capital, which are identified in the table below.

 

Fiscal Year Ended July 31, 2018   JPC        JPI  

Regular monthly distribution per share

      

From net investment income

  $ 0.7668        $ 1.6205  

From net realized capital gains

              

Return of capital

    0.0052          0.0655  
 

 

 

      

 

 

 

Total per share distribution

  $ 0.7720        $ 1.6860  

COMMON SHARE REPURCHASES

During August 2018 (subsequent to the close of this reporting period), the Funds’ Board of Trustees reauthorized an open-market share repurchase program, allowing each Fund to repurchase an aggregate of up to approximately 10% of its outstanding shares.

As of July 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 July 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

  $ 10.16        $ 24.39        $ 9.73        $ 23.89  

Common share price

  $ 9.44        $ 23.13        $ 8.94        $ 23.17  

Premium/(Discount) to NAV

    (7.09 )%         (5.17 )%         (8.12 )%         (3.01 )% 

12-month average premium/(discount) to NAV

    (4.40 )%         (4.20 )%         (3.59 )%         (0.57 )% 

 

18


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 & 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 & 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.

 

19


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.

 

20


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21


JPC     

Nuveen Preferred & Income Opportunities Fund

Performance Overview and Holding Summaries as of July 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 July 31, 2018

 

       Average Annual  
        1-Year        5-Year        10-Year  
JPC at Common Share NAV        0.57%          7.53%          7.93%  
JPC at Common Share Price        (3.76)%          8.59%          9.87%  
ICE BofAML U.S. All Capital Securities Index        1.00%          6.44%          6.16%  
JPC Blended Benchmark        1.66%          6.46%          6.17%  

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. 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

 

22


 

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     72.4%  
$25 Par (or similar) Retail Preferred     43.1%  
Contingent Capital Securities     24.8%  
Corporate Bonds     6.9%  
Convertible Preferred Securities     1.7%  
Common Stocks     0.3%  
Repurchase Agreements     2.1%  
Other Assets Less Liabilities     2.2%  

Net Assets Plus Borrowings and Reverse Repurchase Agreements

    153.5%  
Borrowings     (41.6)%  
Reverse Repurchase Agreements     (11.9)%  

Net Assets

    100%  

Portfolio Composition

(% of total investments)

 

Banks     41.8%  
Insurance     13.6%  
Capital Markets     10.1%  
Food Products     6.0%  
Consumer Finance     4.5%  
Industrial Conglomerates     2.8%  
Diversified Financial Services     2.7%  
Other     17.1%  
Repurchase Agreements     1.4%  

Total

    100%  

Country Allocation1

(% of total investments)

 

United States     71.8%  
United Kingdom     9.3%  
France     4.7%  
Switzerland     2.4%  
Italy     2.4%  
Canada     1.9%  
Spain     1.8%  
Australia     1.8%  
Bermuda     1.4%  
Netherlands     1.2%  
Other     1.3%  

Total

    100%  
 

 

Top Five Issuers

(% of total long-term
investments)

 

JPMorgan Chase & Company     3.9%  

Citigroup Inc.

    3.6%  
Bank of America Corporation     3.3%  
Wells Fargo & Company     3.2%  
Morgan Stanley     2.9%  

Portfolio Credit Quality

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

 

A     1.5%  
BBB     51.8%  
BB or Lower     40.5%  
N/R (not rated)     6.2%  

Total

    100%  
 

 

1

Includes 1.7% (as a percentage of total investments) in emerging market countries.

 

23


JPI     

Nuveen Preferred and Income Term Fund

Performance Overview and Holding Summaries as of July 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 July 31, 2018

 

       Average Annual  
        1-Year        5-Year        Since
Inception
 
JPI at Common Share NAV        0.37%          7.81%          8.71%  
JPI at Common Share Price        (1.40)%          8.43%          7.39%  
ICE BofAML U.S. All Capital Securities Index        1.00%          6.44%          6.94%  
JPI Blended Benchmark        1.81%          6.36%          5.83%  

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

 

24


 

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     65.3%  
Contingent Capital Securities     40.4%  
$25 Par (or similar) Retail Preferred     33.1%  
Other Assets Less Liabilities     1.7%  

Net Assets Plus Borrowings

    140.5%  
Borrowings     (40.5)%  

Net Assets

    100%  

 

Portfolio Composition

(% of total investments)

 

Banks     47.8%  
Insurance     14.3%  
Capital Markets     9.9%  
Diversified Financial Services     5.1%  
Food Products     4.8%  
Other     18.1%  

Total

    100%  

Country Allocation1

(% of total investments)

 

United States     56.7%  
United Kingdom     12.8%  
France     8.3%  
Switzerland     4.3%  
Italy     4.3%  
Spain     3.6%  
Australia     3.2%  
Netherlands     1.8%  
Bermuda     1.7%  
Canada     1.3%  
Other     2.0%  

Total

    100%  
 

 

Top Five Issuers

(% of total long-term
investments)

 

JPMorgan Chase & Company

    3.6%  
Lloyds Banking Group PLC     3.5%  
Farm Credit Bank of Texas     3.4%  
General Electric Corporation     3.2%  
Barclays Bank PLC     3.1%  

Portfolio Credit Quality

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

 

A     1.4%  
BBB     54.9%  
BB or Lower     40.6%  
N/R (not rated)     3.1%  

Total

    100%  
 

 

1

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

 

25


JPS     

Nuveen Preferred & Income Securities Fund

Performance Overview and Holding Summaries as of July 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 July 31, 2018

 

       Average Annual  
        1-Year        5-Year        10-Year  
JPS at Common Share NAV        0.66%          8.18%          8.34%  
JPS at Common Share Price        (6.43)%          9.20%          8.44%  
ICE BofAML U.S. All Capital Securities Index        1.00%          6.44%          6.87%  
JPS Blended Benchmark        1.81%          6.36%          6.64%  

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

 

26


 

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     67.4%  
Contingent Capital Securities     61.4%  
$25 Par (or similar) Retail Preferred     15.5%  
Investment Companies     1.2%  
Corporate Bonds     0.8%  
Convertible Preferred Securities     0.8%  
Repurchase Agreements     3.4%  
Other Assets Less Liabilities     2.2%  

Net Assets Plus Borrowings and Reverse Repurchase Agreements

    152.7%  
Borrowings     (42.6)%  
Reverse Repurchase Agreements     (10.1)%  

Net Assets

    100%  

Portfolio Composition

(% of total investments)

 

Banks     52.8%  
Insurance     18.0%  
Capital Markets     10.2%  
Other     16.0%  
Investment Companies     0.8%  
Repurchase Agreements     2.2%  

Total

    100%  

Country Allocation1

(% of total investments)

 

United States     44.8%  
United Kingdom     18.5%  
France     11.2%  
Switzerland     7.7%  
Sweden     3.2%  
Bermuda     2.4%  
Australia     2.3%  
Spain     2.3%  
Canada     2.2%  
Netherlands     2.0%  
Other     3.4%  

Total

    100%  
 

 

Top Five Issuers

(% of total long-term
investments)

 

Lloyds Banking Group PLC     4.5%  
Societe Generale SA     4.2%  

UBS Group AG

    4.2%  

JPMorgan Chase & Company

    4.0%  

BNP Paribas

    3.9%  

Portfolio Credit Quality

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

 

A     3.2%  
BBB     70.8%  
BB or Lower     26.0%  

Total

    100%  
 

 

1

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

 

27


JPT     

Nuveen Preferred and Income 2022 Term Fund

Performance Overview and Holding Summaries as of July 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 July 31, 2018

 

     Average Annual  
      1-Year               Since
Inception
 
JPI at Common Share NAV      (0.84)%                  3.80%  
JPI at Common Share Price      (2.36)%                  0.72%  
ICE BofAML U.S. All Capital Securities Index      1.00%                  5.32%  

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

 

28


 

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     96.6%  
$25 Par (or similar) Retail Preferred     28.9%  
Repurchase Agreements     1.2%  
Other Assets Less Liabilities     (0.7)%  

Net Assets Plus Borrowings

    126.0%  
Borrowings     (26.0)%  

Net Assets

    100%  

Portfolio Composition

(% of total investments)

 

Banks     33.2%  
Insurance     20.3%  
Capital Markets     10.5%  
Food Products     7.2%  
Diversified Financial Services     5.1%  
U.S. Agency     3.8%  
Other     19.0%  
Repurchase Agreements     0.9%  

Total

    100%  

Country Allocation1

(% of total investments)

 

United States     73.8%  
United Kingdom     6.4%  
Australia     5.2%  
France     3.6%  
Canada     2.6%  

Bermuda

    2.2%  
Netherlands     2.1%  
Germany     1.6%  
Ireland     1.5%  
Japan     1.0%  

Total

    100%  
 

 

Top Five Issuers

(% of total long-term investments)

 

Morgan Stanley

    4.4%  

JPMorgan Chase & Company

    4.2%  

Bank of America Corporation

    4.0%  

Goldman Sachs Group Inc.

    3.9%  

Lloyds Banking Group PLC

    3.9%  

Portfolio Credit Quality

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

 

A     6.1%  
BBB     59.5%  
BB or Lower     30.3%  
N/R (not rated)     4.1%  

Total

    100%  
 

 

1

Includes 2.2% (as a percentage of total investments) in emerging market countries.

 

29


Shareholder Meeting Report

 

The annual meeting of shareholders was held in the offices of Nuveen on April 11, 2018 for JPC, JPI, JPS and JPT; at this meeting the shareholders were asked to elect Board Members.

 

      JPC      JPI      JPS      JPT  
      Common
Shares
     Common
Shares
     Common
Shares
     Common
Shares
 

Approval of the Board Members was reached as follows:

           

Margo L. Cook

           

For

     90,026,156        19,576,328        175,414,531        6,060,565  

Withhold

     2,146,517        429,356        4,421,024        75,388  

Total

     92,172,673        20,005,684        179,835,555        6,135,953  

Jack B. Evans

           

For

     89,406,475        19,546,808        174,740,478        6,060,765  

Withhold

     2,766,198        458,876        5,095,077        75,188  

Total

     92,172,673        20,005,684        179,835,555        6,135,953  

Albin F. Moschner

           

For

     89,895,232        19,590,271        175,410,480        6,054,840  

Withhold

     2,277,441        415,413        4,425,075        81,113  

Total

     92,172,673        20,005,684        179,835,555        6,135,953  

William J. Schneider

           

For

     89,394,685        19,541,143        174,703,829        6,061,565  

Withhold

     2,777,988        464,541        5,131,726        74,388  

Total

     92,172,673        20,005,684        179,835,555        6,135,953  

 

30


Report of Independent Registered Public Accounting Firm

 

To the Shareholders and Board of Trustees of

Nuveen Preferred & Income Opportunities Fund

Nuveen Preferred and Income Term Fund

Nuveen Preferred & Income Securities Fund

Nuveen Preferred and Income 2022 Term Fund:

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Preferred & Income Opportunities Fund, Nuveen Preferred and Income Term Fund, Nuveen Preferred & Income Securities Fund and Nuveen Preferred and Income 2022 Term Fund (the “Funds”) as of July 31, 2018, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended (year ended July 31, 2018 and period from January 26, 2017 (commencement of operations) to July 31, 2017 for Nuveen Preferred and Income 2022 Term Fund), and the related notes (collectively, the “financial statements”) and the financial highlights for each of the years in the four-year period then ended (year ended July 31, 2018 and period from January 26, 2017 to July 31, 2017 for Nuveen Preferred and Income 2022 Term Fund). In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of July 31, 2018, the results of their operations and their cash flows for the year then ended, the changes in their net assets for each of the years in the two-year period then ended (year ended July 31, 2018 and period from January 26, 2017 to July 31, 2017 for Nuveen Preferred and Income 2022 Term Fund), and the financial highlights for each of the years in the four-year period then ended (year ended July 31, 2018 and period from January 26, 2017 to July 31, 2017 for Nuveen Preferred and Income 2022 Term Fund), in conformity with U.S. generally accepted accounting principles. The financial highlights for the year ended July 31, 2014 were audited by other independent registered public accountants whose report, dated September 25, 2014, expressed an unqualified opinion on those financial highlights.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of July 31, 2018, by correspondence with the custodian and brokers or other appropriate auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the auditor of one or more Nuveen investment companies since 2014.

Chicago, Illinois

September 27, 2018

 

31


JPC   

Nuveen Preferred & Income
Opportunities Fund

 

Portfolio of Investments    July 31, 2018

 

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

LONG-TERM INVESTMENTS – 149.2% (98.6% of Total Investments)

 

        
 

$1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 72.4% (47.9% of Total Investments)

 

  
      Air Freight & Logistics – 0.5%                           
$ 5,153    

XPO Logistics Inc., 144A, (3)

    6.500%        6/15/22        BB–      $ 5,294,708  
      Automobiles – 1.7%                           
  18,255    

General Motors Financial Company Inc., (4)

    5.750%        N/A (5)        BB+        17,935,538  
      Banks – 33.1%                           
  37,275    

Bank of America Corporation, (3)

    6.500%        N/A (5)        BBB–        39,977,437  
  8,780    

Bank of America Corporation, (4)

    6.300%        N/A (5)        BBB–        9,350,700  
  2,740    

Bank of America Corporation, (4)

    5.875%        N/A (5)        BBB–        2,718,080  
  3,575    

Barclays Bank PLC, 144A, (4)

    10.180%        6/12/21        A–        4,114,971  
  10,675    

CIT Group Inc., Series A

    5.800%        N/A (5)        B+        10,488,187  
  16,975    

Citigroup Inc.

    6.250%        N/A (5)        BB+        17,579,480  
  8,885    

Citigroup Inc.

    6.125%        N/A (5)        BB+        9,240,400  
  13,260    

Citigroup Inc., (4)

    5.875%        N/A (5)        BB+        13,604,627  
  2,925    

Citigroup Inc.

    5.800%        N/A (5)        BB+        2,998,124  
  8,264    

Citizens Financial Group Inc.

    5.500%        N/A (5)        BB+        8,464,237  
  4,690    

Cobank Agricultural Credit Bank, (3)

    6.250%        N/A (5)        BBB+        4,994,850  
  3,560    

Commerzbank AG, 144A, (4)

    8.125%        9/19/23        BBB        4,075,817  
  4,204    

HSBC Capital Funding LP, Debt, 144A

    10.176%        N/A (5)        BBB+        6,327,019  
  3,675    

Huntington Bancshares Inc.

    5.700%        N/A (5)        Baa3        3,629,063  
  34,420    

JPMorgan Chase & Company

    6.750%        N/A (5)        BBB        37,603,850  
  125    

JPMorgan Chase & Company

    6.100%        N/A (5)        BBB        128,729  
  9,710    

JPMorgan Chase & Company

    5.300%        N/A (5)        BBB        9,879,924  
  12,765    

JPMorgan Chase & Company, (3-Month LIBOR reference rate + 3.470% spread), (6)

    5.809%        N/A (5)        BBB–        12,821,166  
  4,090    

KeyCorp Convertible Preferred Stock

    5.000%        N/A (5)        Baa3        3,957,075  
  23,425    

Lloyds Bank PLC, 144A, (3)

    12.000%        N/A (5)        Baa3        28,522,374  
  6,520    

M&T Bank Corporation, (3)

    6.450%        N/A (5)        Baa2        7,033,449  
  4,990    

M&T Bank Corporation, (4)

    5.125%        N/A (5)        Baa2        4,965,050  
  5,656    

PNC Financial Services Inc.

    5.000%        N/A (5)        Baa2        5,613,580  
  22,358    

PNC Financial Services Inc., (3)

    6.750%        N/A (5)        Baa2        24,118,692  
  4,633    

Royal Bank of Scotland Group PLC, (4)

    7.648%        N/A (5)        Ba1        5,768,085  
  5,325    

SunTrust Bank Inc.

    5.625%        N/A (5)        Baa3        5,460,788  
  3,250    

SunTrust Bank Inc.

    5.050%        N/A (5)        Baa3        3,191,094  
  3,750    

Wachovia Capital Trust III

    5.570%        N/A (5)        Baa2        3,730,312  
  3,145    

Wells Fargo & Company

    5.900%        N/A (5)        Baa2        3,156,008  
  33,430    

Wells Fargo & Company, (3)

    5.875%        N/A (5)        Baa2        34,967,780  
  8,180    

Wells Fargo & Company, (3-Month LIBOR reference rate + 3.770% spread), (6)

    6.111%        N/A (5)        Baa2        8,247,076  
  9,666    

Zions Bancorporation, (4)

    7.200%        N/A (5)        BB        10,342,620  
 

Total Banks

                               347,070,644  
      Capital Markets – 2.5%                           
  2,220    

Bank of New York Mellon

    4.950%        N/A (5)        Baa1        2,275,611  
  4,160    

Credit Suisse Group AG, 144A

    7.500%        N/A (5)        Ba2        4,288,960  
  9,240    

Goldman Sachs Group Inc.

    5.375%        N/A (5)        Ba1        9,424,800  
  5,195    

Goldman Sachs Group Inc., (4)

    5.300%        N/A (5)        Ba1        5,117,075  
  4,195    

Morgan Stanley

    5.550%        N/A (5)        BB+        4,299,875  
  1,525    

State Street Corporation, (4)

    5.250%        N/A (5)        Baa1        1,563,125  
 

Total Capital Markets

                               26,969,446  
      Chemicals – 0.4%                           
  3,475    

Blue Cube Spinco LLC, (3)

    9.750%        10/15/23        BB+        3,935,438  

 

32


Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Commercial Services & Supplies – 0.7%                           
$ 6,870    

AerCap Global Aviation Trust, 144A, (4)

    6.500%        6/15/45        Ba1      $ 7,084,688  
      Consumer Finance – 2.2%                           
  3,581    

American Express Company, (4)

    5.200%        N/A (5)        Baa2        3,630,239  
  2,010    

American Express Company, (4)

    4.900%        N/A (5)        Baa2        2,020,050  
  10,105    

Capital One Financial Corporation, (4)

    5.550%        N/A (5)        Baa3        10,357,625  
  7,770    

Discover Financial Services, (4)

    5.500%        N/A (5)        BB–        7,614,600  
 

Total Consumer Finance

                               23,622,514  
      Diversified Financial Services – 3.1%                           
  5,670    

BNP Paribas, 144A

    7.195%        N/A (5)        BBB        5,946,413  
  15    

Compeer Financial ACA, 144A

    6.750%        N/A (5)        BB+        15,836,000  
  5,823    

Cooperative Rabobank UA, 144A

    11.000%        N/A (5)        BBB        6,184,026  
  2,050    

Depository Trust & Clearing Corporation, 144A

    4.875%        N/A (5)        A        2,085,875  
  1,955    

Voya Financial Inc., (4)

    5.650%        5/15/53        Baa3        1,971,539  
 

Total Diversified Financial Services

                               32,023,853  
      Electric Utilities – 2.8%                           
  3,620    

Electricite de France SA, 144A

    5.250%        N/A (5)        BBB        3,588,325  
  23,985    

Emera Inc., (3), (4)

    6.750%        6/15/76        BBB–        25,304,175  
 

Total Electric Utilities

                               28,892,500  
      Energy Equipment & Services – 0.5%                           
  5,015    

Transcanada Trust, (3)

    5.875%        8/15/76        Baa2        5,040,075  
      Equity Real Estate Investment Trusts – 1.3%                           
  12    

Sovereign Real Estate Investment Trust, 144A

    12.000%        N/A (5)        BB+        13,753,375  
      Food Products – 4.7%                           
  2,245    

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

    7.125%        N/A (5)        Baa3        2,413,375  
  1,785    

Dean Foods Company, 144A

    6.500%        3/15/23        BB–        1,749,300  
  6,965    

Land O’ Lakes Incorporated, 144A

    7.250%        N/A (5)        BB        7,557,025  
  34,865    

Land O’ Lakes Incorporated, 144A, (3)

    8.000%        N/A (5)        BB        38,177,175  
 

Total Food Products

                               49,896,875  
      Industrial Conglomerates – 4.2%                           
  44,540    

General Electric Corporation, (4)

    5.000%        N/A (5)        BBB+        43,756,096  
      Insurance – 11.9%                           
  3,165    

Aegon NV, (4)

    5.500%        4/11/48        Baa1        3,087,629  
  5,485    

American International Group Inc., (4)

    5.750%        4/01/48        Baa2        5,416,438  
  7,290    

Assurant Inc., (4)

    7.000%        3/27/48        BB+        7,435,800  
  25,035    

Assured Guaranty Municipal Holdings Inc., 144A, (4)

    6.400%        12/15/66        BBB+        25,035,000  
  10,000    

Friends Life Holdings PLC, Reg S

    7.875%        N/A (5)        A–        10,083,700  
  2,108    

La Mondiale SAM, Reg S

    7.625%        N/A (5)        BBB        2,158,444  
  7,117    

Liberty Mutual Group, 144A, (3)

    7.800%        3/15/37        Baa3        8,398,060  
  9,335    

MetLife Capital Trust IV, 144A, (3)

    7.875%        12/15/37        BBB        11,587,816  
  4,715    

MetLife Inc., 144A, (3)

    9.250%        4/08/38        BBB        6,412,400  
  3,430    

MetLife Inc., (4)

    5.875%        N/A (5)        BBB        3,513,006  
  385    

MetLife Inc.

    5.250%        N/A (5)        BBB        392,700  
  575    

Nationwide Financial Services Capital Trust, (3)

    7.899%        3/01/37        Baa2        647,316  
  9,550    

Nationwide Financial Services Inc., (3)

    6.750%        5/15/37        Baa2        10,481,124  
  6,855    

Provident Financing Trust I, (4)

    7.405%        3/15/38        Baa3        7,540,500  
  3,315    

Prudential Financial Inc., (4)

    5.875%        9/15/42        BBB+        3,538,763  
  1,270    

Prudential Financial Inc., (4)

    5.625%        6/15/43        BBB+        1,321,435  
  2,540    

QBE Insurance Group Limited, Reg S

    6.750%        12/02/44        BBB        2,624,607  
  14,375    

QBE Insurance Group Limited, 144A, (4)

    7.500%        11/24/43        Baa1        15,652,363  
 

Total Insurance

                               125,327,101  
      Media – 1.0%                           
  10,000    

Liberty Interactive LLC, (3)

    8.500%        7/15/29        BB        10,700,000  

 

33


JPC    Nuveen Preferred & Income Opportunities Fund (continued)
   Portfolio of Investments    July 31, 2018

 

Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Metals & Mining – 0.4%                           
$ 1,600    

BHP Billiton Finance USA Limited, 144A

    6.750%        10/19/75        A–      $ 1,748,000  
  2,630    

BHP Billiton Finance USA Limited, 144A

    6.250%        10/19/75        A–        2,766,760  
 

Total Metals & Mining

                               4,514,760  
      Multi-Utilities – 0.3%                           
  3,235    

NiSource Inc., 144A

    5.650%        N/A (5)        BBB–        3,218,825  
      U.S. Agency – 1.1%                           
  5    

Farm Credit Bank of Texas, (4)

    10.000%        N/A (5)        Baa1        5,322,750  
  5,835    

Farm Credit Bank of Texas, 144A

    6.200%        N/A (5)        Baa1        5,907,938  
 

Total U.S. Agency

                               11,230,688  
 

Total $1,000 Par (or similar) Institutional Preferred (cost $743,444,263)

 

                       760,267,124  
Shares     Description (1)   Coupon              Ratings (2)      Value  
 

$25 PAR (OR SIMILAR) RETAIL PREFERRED – 43.1% (28.5% of Total Investments)

 

      Banks – 10.1%                           
  126,000    

AgriBank FCB, (7)

    6.875%           BBB+      $ 13,482,000  
  469,916    

Citigroup Inc., (4)

    7.125%           BB+        13,134,152  
  73,511    

Cobank Agricultural Credit Bank, (4), (7)

    6.200%           BBB+        7,645,144  
  172,975    

Cobank Agricultural Credit Bank, (7)

    6.250%           BBB+        17,989,400  
  38,725    

Cobank Agricultural Credit Bank, (7)

    6.125%           BBB+        3,882,181  
  218,164    

Fifth Third Bancorp

    6.625%           Baa3        5,951,514  
  178,757    

FNB Corporation, (3)

    7.250%           Ba2        5,144,626  
  434,200    

Huntington Bancshares Inc., (4)

    6.250%           Baa3        11,467,222  
  153,075    

KeyCorp Preferred Stock, (4)

    6.125%           Baa3        4,143,740  
  82,000    

People’s United Financial Inc., (4)

    5.625%           BB+        2,126,260  
  397,116    

Regions Financial Corp, (4)

    6.375%           BB+        10,813,469  
  113,600    

US Bancorp

    6.500%           A3        3,162,624  
  27,800    

Wells Fargo & Company

    6.625%           Baa2        763,944  
  197,508    

Western Alliance Bancorp, (3)

    6.250%           N/R        5,028,554  
  39,465    

Zions Bancorporation, (4)

    6.300%                 BB        1,061,214  
 

Total Banks

                               105,796,044  
      Capital Markets – 8.5%                           
  173,436    

Apollo Investment Corporation, (3)

    6.875%           BBB–        4,365,384  
  142,980    

B. Riley Financial Inc.

    7.500%           N/R        3,567,351  
  212,350    

B. Riley Financial Inc.

    7.250%           N/R        5,257,786  
  134,939    

Charles Schwab Corporation, (4)

    6.000%           BBB        3,585,329  
  129,169    

Charles Schwab Corporation, (3), (4)

    5.950%           BBB        3,404,895  
  134,000    

Cowen Inc.

    7.350%           N/R        3,399,580  
  74,600    

Goldman Sachs Group, Inc.

    5.500%           Ba1        1,917,220  
  52,802    

Hercules Technology Growth Capital Incorporated, (3)

    6.250%           BBB–        1,327,970  
  370,280    

Ladenburg Thalmann Financial Services Inc.

    8.000%           N/R        9,442,881  
  844,397    

Morgan Stanley, (3), (4)

    7.125%           BB+        23,702,224  
  280,300    

Morgan Stanley, (4)

    6.875%           BB+        7,666,205  
  165,800    

Morgan Stanley

    6.375%           BB+        4,453,388  
  221,100    

Morgan Stanley, (4)

    5.850%           BB+        5,733,123  
  54,813    

Northern Trust Corporation

    5.850%           BBB+        1,481,595  
  145,905    

Oaktree Specialty Lending Corporation, (3)

    6.125%           BB+        3,580,509  
  51,445    

State Street Corporation, (4)

    5.350%           Baa1        1,341,686  
  138,364    

Stifel Financial Corporation, (4)

    6.250%           BB–        3,622,370  
  43,100    

Triangle Capital Corporation, (3)

    6.375%                 N/R        1,087,413  
 

Total Capital Markets

                               88,936,909  
      Consumer Finance – 3.5%                           
  169,911    

Capital One Financial Corporation, (4)

    6.700%           Baa3        4,470,358  
  1,219,645    

GMAC Capital Trust I, (3)

    7.198%                 B+        32,405,968  
 

Total Consumer Finance

                               36,876,326  

 

34


Shares     Description (1)   Coupon              Ratings (2)      Value  
      Diversified Telecommunication Services – 1.2%                           
  334,132    

Qwest Corporation, (3)

    7.000%           BBB–      $ 7,771,910  
  197,715    

Qwest Corporation, (3)

    6.875%                 BBB–        4,466,382  
 

Total Diversified Telecommunication Services

                               12,238,292  
      Equity Real Estate Investment Trusts – 0.3%                           
  147,988    

Senior Housing Properties Trust, (3)

    5.625%                 BBB–        3,613,867  
      Food Products – 4.3%                           
  440,111    

CHS Inc., (3), (4)

    7.875%           N/R        12,639,988  
  517,590    

CHS Inc.

    7.100%           N/R        14,414,882  
  486,440    

CHS Inc., (4)

    6.750%           N/R        13,051,185  
  23,000    

Dairy Farmers of America Inc., 144A, (7)

    7.875%           Baa3        2,328,750  
  24,500    

Dairy Farmers of America Inc., 144A, (7)

    7.875%                 Baa3        2,829,750  
 

Total Food Products

                               45,264,555  
      Insurance – 8.7%                           
  27,535    

Allstate Corporation

    6.750%           BBB–        705,447  
  302,283    

Argo Group US Inc., (3)

    6.500%           BBB–        7,681,011  
  379,916    

Aspen Insurance Holdings Limited, (4)

    5.950%           BBB–        9,744,845  
  73,500    

Aspen Insurance Holdings Limited

    5.625%           BBB–        1,808,100  
  125,700    

Axis Capital Holdings Limited

    5.500%           BBB        3,122,388  
  56,900    

Delphi Financial Group Inc., (4), (7)

    1.863%           BB+        1,251,800  
  409,500    

Enstar Group Ltd

    7.000%           BB+        10,511,865  
  171,411    

Hartford Financial Services Group Inc., (3)

    7.875%           Baa2        4,868,072  
  591,707    

Kemper Corporation, (3)

    7.375%           Ba1        15,408,050  
  179,883    

Maiden Holdings North America Limited, (4)

    7.750%           N/R        4,182,280  
  88,895    

National General Holding Company

    7.625%           N/R        2,287,268  
  76,400    

National General Holding Company

    7.500%           N/R        1,924,516  
  153,954    

National General Holding Company

    7.500%           N/R        3,851,929  
  132,233    

PartnerRe Limited, (3), (4)

    7.250%           Baa2        3,672,110  
  199,596    

Reinsurance Group of America Inc., (3), (4)

    6.200%           BBB+        5,351,169  
  347,400    

Reinsurance Group of America Inc., (3), (4)

    5.750%           BBB+        8,973,342  
  220,272    

Torchmark Corporation, (3), (4)

    6.125%                 BBB+        5,760,113  
 

Total Insurance

                               91,104,305  
      Mortgage Real Estate Investment Trusts – 0.5%                           
  96,986    

MFA Financial Inc.

    8.000%           N/R        2,491,570  
  107,000    

Wells Fargo REIT

    6.375%                 BBB        2,791,630  
 

Total Mortgage Real Estate Investment Trusts

                               5,283,200  
      Oil, Gas & Consumable Fuels – 0.8%                           
  80,400    

NuStar Energy LP, (4)

    8.500%           B1        1,932,816  
  50,000    

NuStar Energy LP, (4)

    7.625%           B1        1,116,000  
  240,017    

NuStar Logistics Limited Partnership, (4)

    9.082%                 B+        6,137,235  
 

Total Oil, Gas & Consumable Fuels

                               9,186,051  
      Thrifts & Mortgage Finance – 1.7%                           
  216,673    

Federal Agricultural Mortgage Corporation, (3)

    6.875%           N/R        5,642,165  
  143,124    

Federal Agricultural Mortgage Corporation

    6.000%           N/R        3,699,755  
  310,066    

New York Community Bancorp Inc., (4)

    6.375%                 Ba1        8,325,272  
 

Total Thrifts & Mortgage Finance

                               17,667,192  
      U.S. Agency – 2.5%                           
  247    

Farm Credit Bank of Texas, 144A, (7)

    6.750%                 Baa1        26,418,300  
      Wireless Telecommunication Services – 1.0%                           
  415,473    

United States Cellular Corporation, (3)

    7.250%                 Ba1        10,652,728  
 

Total $25 Par (or similar) Retail Preferred (cost $439,595,298)

                               453,037,769  

 

35


JPC    Nuveen Preferred & Income Opportunities Fund (continued)
   Portfolio of Investments    July 31, 2018

 

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

CONTINGENT CAPITAL SECURITIES – 24.8% (16.3% of Total Investments) (8)

 

        
      Banks – 20.2%                           
$ 2,820    

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

    6.750%        N/A (5)        Baa2      $ 2,936,324  
  13,800    

Banco Bilbao Vizcaya Argentaria S.A, (4)

    6.125%        N/A (5)        Ba2        12,696,000  
  1,205    

Banco Mercantil del Norte, 144A

    7.625%        N/A (5)        BB        1,270,673  
  2,200    

Banco Santander SA, Reg S

    6.375%        N/A (5)        Ba1        2,205,544  
  22,090    

Barclays PLC, Reg S

    7.875%        N/A (5)        BB+        23,221,582  
  14,035    

Credit Agricole SA, 144A

    8.125%        N/A (5)        BBB–        15,403,412  
  9,585    

Credit Agricole SA, 144A

    7.875%        N/A (5)        BBB–        10,197,482  
  3,675    

HSBC Holdings PLC

    6.375%        N/A (5)        BBB        3,691,023  
  2,290    

HSBC Holdings PLC, (4)

    6.000%        N/A (5)        BBB        2,219,010  
  1,000    

ING Groep N.V, Reg S

    6.875%        N/A (5)        BBB–        1,027,500  
  5,055    

ING Groep N.V

    6.500%        N/A (5)        BBB–        5,005,967  
  19,820    

Intesa Sanpaolo SpA, 144A

    7.700%        N/A (5)        BB–        18,928,100  
  24,870    

Lloyds Banking Group PLC

    7.500%        N/A (5)        Baa3        25,678,274  
  5,000    

Nordea Bank AB, 144A

    6.125%        N/A (5)        BBB        4,906,250  
  8,605    

Royal Bank of Scotland Group PLC

    8.625%        N/A (5)        Ba2        9,285,656  
  11,540    

Royal Bank of Scotland Group PLC

    8.000%        N/A (5)        Ba2        12,256,865  
  1,720    

Royal Bank of Scotland Group PLC

    7.500%        N/A (5)        Ba2        1,775,900  
  5,875    

Societe Generale SA, 144A, (4)

    6.750%        N/A (5)        BB+        5,625,312  
  4,190    

Societe Generale SA, 144A

    8.000%        N/A (5)        BB+        4,499,934  
  8,316    

Societe Generale SA, 144A

    7.875%        N/A (5)        BB+        8,783,775  
  6,535    

Societe Generale SA, 144A, (4)

    7.375%        N/A (5)        BB+        6,869,919  
  6,485    

Standard Chartered PLC, 144A

    7.750%        N/A (5)        Ba1        6,760,613  
  7,190    

Standard Chartered PLC, 144A

    7.500%        N/A (5)        Ba1        7,531,525  
  19,690    

UniCredit SpA, Reg S

    8.000%        N/A (5)        B+        19,000,299  
  207,591    

Total Banks

                               211,776,939  
      Capital Markets – 3.5%                           
  1,600    

Credit Suisse Group AG, Reg S

    7.125%        N/A (5)        Ba2        1,658,400  
  13,820    

Credit Suisse Group AG, 144A

    7.500%        N/A (5)        BB        14,735,437  
  2,900    

Macquarie Bank Limited, 144A, (4)

    6.125%        N/A (5)        Ba1        2,646,250  
  860    

UBS Group AG, Reg S

    7.125%        N/A (5)        BBB–        892,250  
  15,925    

UBS Group AG, Reg S

    7.000%        N/A (5)        BBB–        16,784,345  
  35,105    

Total Capital Markets

                               36,716,682  
      Diversified Financial Services – 1.1%                           
  10,735    

BNP Paribas SA, 144A, (4)

    7.375%        N/A (5)        BBB–        11,405,938  
$ 253,431    

Total Contingent Capital Securities (cost $268,972,104)

                               259,899,559  
Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

CORPORATE BONDS – 6.9% (4.6% of Total Investments)

          
      Automobiles – 0.3%                           
$ 2,825    

Ford Motor Company, (3)

    7.450%        7/16/31        BBB      $ 3,278,271  
      Biotechnology – 0.3%                           
  3,500    

AMAG Pharmaceuticals Inc., 144A, (3)

    7.875%        9/01/23        Ba3        3,705,625  
      Capital Markets – 0.4%                           
  3,960    

Donnelley Financial Solutions Inc., (3)

    8.250%        10/15/24        B        4,128,300  
      Chemicals – 0.5%                           
  4,675    

CVR Partners LP / CVR Nitrogen Finance Corp, 144A, (3)

    9.250%        6/15/23        B+        4,973,031  
      Consumer Finance – 1.0%                           
  9,950    

Navient Corporation, (3)

    8.000%        3/25/20        BB        10,497,250  
      Equity Real Estate Investment Trusts – 0.7%                           
  8,175    

Uniti Group LP / Uniti Group Finance Inc. / CSL Capital LLC, (3)

    8.250%        10/15/23        BB–        7,643,625  

 

36


Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      IT Services – 0.7%                           
$ 6,750    

First Data Corporation, 144A, (3)

    7.000%        12/01/23        B      $ 7,062,188  
      Media – 1.4%                           
  10,425    

DISH DBS Corporation, (3)

    7.750%        7/01/26        BB        9,108,844  
  4,725    

Viacom Inc., (3)

    6.875%        4/30/36        BBB        5,391,792  
  15,150    

Total Media

                               14,500,636  
      Oil, Gas & Consumable Fuels – 0.8%                           
  7,600    

Enviva Partners LP / Enviva Partners Finance Corp, (3)

    8.500%        11/01/21        BB–        7,885,000  
      Specialty Retail – 0.5%                           
  6,450    

L Brands Inc., (3)

    6.875%        11/01/35        BB+        5,563,125  
      Wireless Telecommunication Services – 0.3%                           
  3,375    

Altice Financing SA, 144A, (3)

    7.500%        5/15/26        B+        3,285,900  
$ 72,410    

Total Corporate Bonds (cost $76,136,726)

                               72,522,951  
Shares     Description (1)   Coupon              Ratings (2)      Value  
 

CONVERTIBLE PREFERRED SECURITIES – 1.7% (1.1% of Total Investments)

 

        
      Electric Utilities – 1.2%                           
  167,100    

NextEra Energy Inc., (3)

    6.371%                 BBB      $ 12,448,950  
      Multi-Utilities – 0.5%                           
  53    

Sempra Energy

    6.750%                 N/R        5,405,966  
 

Total Convertible Preferred Securities (cost $15,397,746)

                               17,854,916  
Shares     Description (1)                           Value  
 

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

          
      Capital Markets – 0.3%                           
  184,035    

Ares Capital Corporation

                             $ 3,100,990  
 

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

                               3,100,990  
 

Total Long-Term Investments (cost $1,546,582,799)

                               1,566,683,309  
Principal
Amount (000)
    Description (1)   Coupon      Maturity              Value  
      SHORT-TERM INVESTMENTS – 2.1% (1.4% of Total Investments)                           
      REPURCHASE AGREEMENTS – 2.1% (1.4% of Total Investments)                           
$ 21,727    

Repurchase Agreement with Fixed Income Clearing Corporation, dated 7/31/18, repurchase price $21,727,205,
collateralized by $22,220,000 U.S. Treasury Notes,
2.875%, due 7/31/25, value $22,164,450

    0.900%        8/01/18               $ 21,726,662  
 

Total Short-Term Investments (cost $21,726,662)

                               21,726,662  
 

Total Investments (cost $1,568,309,461) – 151.3%

                               1,588,409,971  
 

Borrowings – (41.6)% (9), (10)

                               (437,000,000
 

Reverse Repurchase Agreements – (11.9)% (11)

                               (125,000,000
 

Other Assets Less Liabilities – 2.2% (12)

                               23,483,562  
 

Net Assets Applicable to Common Shares – 100%

                             $ 1,049,893,533  

 

37


JPC    Nuveen Preferred & Income Opportunities Fund (continued)
   Portfolio of Investments    July 31, 2018

 

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 (13)
    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     $ 13,910,494     $ 13,910,494  

Total unrealized appreciation on interest rate swaps

 

                                                          $ 13,910,494  

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. Ratings are not covered by the report of independent registered public accounting firm.

 

(3)

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 $317,089,603 have been pledged as collateral for reverse repurchase agreements.

 

(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 $365,628,780.

 

(5)

Perpetual security. Maturity date is not applicable.

 

(6)

Variable rate security. The rate shown is the coupon as of the end of the reporting period.

 

(7)

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.

 

(8)

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.

 

(9)

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 $1,034,821,294 have been pledged as collateral for borrowings.

 

(10)

Borrowings as a percentage of Total Investments is 27.5%.

 

(11)

Reverse Repurchase Agreements as a percentage of Total Investments is 7.9%.

 

(12)

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.

 

(13)

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.

 

38


JPI   

Nuveen Preferred and Income
Term Fund

 

Portfolio of Investments    July 31, 2018

 

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

LONG-TERM INVESTMENTS – 138.8% (100.0% Total Investments)

 

 

$1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 65.3% (47.1% of Total Investments)

 

      Automobiles – 1.1%                           
$ 6,120    

General Motors Financial Company Inc.

    5.750%        N/A (3)        BB+      $ 6,012,900  
      Banks – 24.1%                           
  7,375    

Bank of America Corporation

    6.500%        N/A (3)        BBB–        7,909,688  
  5,510    

Bank of America Corporation, (4)

    6.300%        N/A (3)        BBB–        5,868,150  
  2,380    

Bank of America Corporation

    5.875%        N/A (3)        BBB–        2,360,960  
  4,000    

Barclays Bank PLC, 144A, (4)

    10.180%        6/12/21        A–        4,604,164  
  7,315    

Citigroup Inc.

    6.125%        N/A (3)        BB+        7,607,600  
  12,130    

Citigroup Inc., (4)

    5.875%        N/A (3)        BB+        12,445,258  
  4,390    

Citizens Financial Group Inc.

    5.500%        N/A (3)        BB+        4,496,370  
  3,065    

Commerzbank AG, 144A

    8.125%        9/19/23        BBB        3,509,095  
  4,351    

HSBC Capital Funding LP, Debt, 144A

    10.176%        N/A (3)        BBB+        6,548,255  
  15,944    

JPMorgan Chase & Company

    6.750%        N/A (3)        BBB        17,418,819  
  8,465    

JPMorgan Chase & Company

    5.300%        N/A (3)        BBB        8,613,138  
  1,905    

JPMorgan Chase & Company, (3-Month LIBOR reference rate + 3.470% spread), (5)

    5.808%        N/A (3)        BBB–        1,913,382  
  3,320    

KeyCorp Convertible Preferred Stock

    5.000%        N/A (3)        Baa3        3,212,100  
  3,000    

Lloyds Bank PLC, 144A

    12.000%        N/A (3)        Baa3        3,652,812  
  1,340    

M&T Bank Corporation

    6.450%        N/A (3)        Baa2        1,445,525  
  4,015    

M&T Bank Corporation

    5.125%        N/A (3)        Baa2        3,994,925  
  4,995    

PNC Financial Services Inc.

    5.000%        N/A (3)        Baa2        4,957,538  
  2,150    

PNC Financial Services Inc.

    6.750%        N/A (3)        Baa2        2,319,313  
  4,201    

Royal Bank of Scotland Group PLC, (4)

    7.648%        N/A (3)        Ba1        5,230,245  
  4,980    

SunTrust Banks Inc.

    5.050%        N/A (3)        Baa3        4,889,738  
  3,010    

Wachovia Capital Trust III

    5.570%        N/A (3)        Baa2        2,994,198  
  2,821    

Wells Fargo & Company

    5.900%        N/A (3)        Baa2        2,830,874  
  7,925    

Wells Fargo & Company

    5.875%        N/A (3)        Baa2        8,289,550  
  6,776    

Wells Fargo & Company, (3-Month LIBOR reference rate + 3.770% spread), (5)

    6.111%        N/A (3)        Baa2        6,831,562  
 

Total Banks

                               133,943,259  
      Capital Markets – 3.7%                           
  1,950    

Bank of New York Mellon

    4.950%        N/A (3)        Baa1        1,998,848  
  3,610    

Credit Suisse Group AG, 144A

    7.500%        N/A (3)        Ba2        3,721,910  
  8,015    

Goldman Sachs Group Inc.

    5.375%        N/A (3)        Ba1        8,175,299  
  5,050    

Goldman Sachs Group Inc.

    5.300%        N/A (3)        Ba1        4,974,250  
  500    

Morgan Stanley

    5.550%        N/A (3)        BB+        512,500  
  1,155    

State Street Corporation, (4)

    5.250%        N/A (3)        Baa1        1,183,875  
 

Total Capital Markets

                               20,566,682  
      Commercial Services & Supplies – 1.0%                           
  5,495    

AerCap Global Aviation Trust, 144A, (4)

    6.500%        6/15/45        Ba1        5,666,719  
      Consumer Finance – 2.5%                           
  3,110    

American Express Company, (4)

    5.200%        N/A (3)        Baa2        3,152,763  
  1,850    

American Express Company, (4)

    4.900%        N/A (3)        Baa2        1,859,250  
  5,450    

Capital One Financial Corporation, (4)

    5.550%        N/A (3)        Baa3        5,586,249  
  3,560    

Discover Financial Services

    5.500%        N/A (3)        BB–        3,488,800  
 

Total Consumer Finance

                               14,087,062  
      Diversified Financial Services – 5.5%                           
  5,875    

BNP Paribas SA, 144A

    7.195%        N/A (3)        BBB        6,161,406  
  14    

Compeer Financial ACA, 144A

    6.750%        N/A (3)        BB+        14,659,000  
  4,953    

Cooperative Rabobank UA, 144A

    11.000%        N/A (3)        BBB        5,259,554  

 

39


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

 

Principal
Amount (000)/
Shares
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Diversified Financial Services (continued)                           
$ 2,250    

Depository Trust & Clearing Corporation, 144A

    4.875%        N/A (3)        A      $ 2,289,375  
  2,052    

Voya Financial Inc., (4)

    5.650%        5/15/53        Baa3        2,069,360  
 

Total Diversified Financial Services

                               30,438,695  
      Electric Utilities – 2.3%                           
  2,370    

Electricite de France SA, 144A

    5.250%        N/A (3)        BBB        2,349,263  
  9,525    

Emera Inc., (4)

    6.750%        6/15/76        BBB–        10,048,875  
 

Total Electric Utilities

                               12,398,138  
      Equity Real Estate Investment Trusts – 2.6%                           
  12    

Sovereign Real Estate Investment Trust, 144A

    12.000%        N/A (3)        BB+        14,450,150  
      Food Products – 3.3%                           
  2,360    

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

    7.125%        N/A (3)        Baa3        2,537,000  
  1,285    

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

    7.450%        3/15/28        Ba1        1,419,925  
  3,120    

Land O’ Lakes Incorporated, 144A

    7.250%        N/A (3)        BB        3,385,200  
  10,170    

Land O’ Lakes Incorporated, 144A

    8.000%        N/A (3)        BB        11,136,150  
 

Total Food Products

                               18,478,275  
      Industrial Conglomerates – 4.4%                           
  24,962    

General Electric Corporation

    5.000%        N/A (3)        BBB+        24,522,669  
      Insurance – 13.2%                           
  2,745    

Aegon NV

    5.500%        4/11/48        Baa1        2,677,896  
  4,755    

American International Group Inc.

    5.750%        4/01/48        Baa2        4,695,563  
  6,270    

Assurant Inc.

    7.000%        3/27/48        BB+        6,395,400  
  21,710    

Assured Guaranty Municipal Holdings Inc., 144A, (4)

    6.400%        12/15/66        BBB+        21,710,000  
  1,824    

La Mondiale SAM, Reg S

    7.625%        N/A (3)        BBB        1,867,647  
  3,915    

MetLife Inc., 144A

    9.250%        4/08/38        BBB        5,324,400  
  2,960    

MetLife Inc.

    5.875%        N/A (3)        BBB        3,031,632  
  335    

MetLife Inc.

    5.250%        N/A (3)        BBB        341,700  
  7,254    

Provident Financing Trust I, (4)

    7.405%        3/15/38        Baa3        7,979,400  
  3,325    

Prudential Financial Inc., (4)

    5.875%        9/15/42        BBB+        3,549,438  
  12,260    

QBE Insurance Group Limited, 144A, (4)

    7.500%        11/24/43        Baa1        13,349,424  
  2,335    

QBE Insurance Group Limited

    6.750%        N/A (3)        BBB        2,412,779  
 

Total Insurance

                               73,335,279  
      Metals & Mining – 0.7%                           
  1,395    

BHP Billiton Finance USA Limited, 144A

    6.750%        10/19/75        A–        1,524,037  
  2,290    

BHP Billiton Finance USA Limited, 144A

    6.250%        10/19/75        A–        2,409,080  
 

Total Metals & Mining

                               3,933,117  
      Multi-Utilities – 0.5%                           
  2,815    

NiSource Inc., 144A

    5.650%        N/A (3)        BBB–        2,800,925  
      U.S. Agency – 0.4%                           
  1    

Farm Credit Bank of Texas, (4)

    10.000%        N/A (3)        Baa1        851,640  
  1,180    

Farm Credit Bank of Texas, 144A

    6.200%        N/A (3)        Baa1        1,194,750  
  1,403    

Total U.S. Agency

 

              2,046,390  
 

Total $1,000 Par (or similar) Institutional Preferred (cost $349,270,758)

 

                       362,680,260  
Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
 

CONTINGENT CAPITAL SECURITIES – 40.4% (29.1% of Total Investments) (7)

 

      Banks – 33.0%                           
$ 2,450    

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

    6.750%        N/A (3)        Baa2      $ 2,551,063  
  11,800    

Banco Bilbao Vizcaya Argentaria S.A

    6.125%        N/A (3)        Ba2        10,856,000  
  1,110    

Banco Mercantil del Norte, 144A

    7.625%        N/A (3)        BB        1,170,495  

 

40


Principal
Amount (000)
    Description (1)   Coupon      Maturity      Ratings (2)      Value  
      Banks (continued)                           
$ 2,200    

Banco Santander SA, Reg S

    6.375%        N/A (3)        Ba1      $ 2,205,544  
  18,505    

Barclays PLC

    7.875%        N/A (3)        BB+        19,452,936  
  12,184    

Credit Agricole SA, 144A

    8.125%        N/A (3)        BBB–        13,371,940  
  8,175    

Credit Agricole SA, 144A

    7.875%        N/A (3)        BBB–        8,697,383  
  3,381    

HSBC Holdings PLC

    6.375%        N/A (3)        BBB        3,395,741  
  1,960    

HSBC Holdings PLC

    6.000%        N/A (3)        BBB        1,899,240  
  1,000    

ING Groep N.V

    6.875%        N/A (3)        BBB–        1,027,500  
  4,890    

ING Groep N.V, Reg S

    6.500%        N/A (3)        BBB–        4,842,567  
  17,125    

Intesa Sanpaolo SpA, 144A

    7.700%        N/A (3)        BB–        16,354,375  
  22,860    

Lloyds Banking Group PLC

    7.500%        N/A (3)        Baa3        23,602,950  
  4,390    

Nordea Bank AB, 144A

    6.125%        N/A (3)        BBB        4,307,688  
  5,560    

Royal Bank of Scotland Group PLC

    8.625%        N/A (3)        Ba2        5,999,796  
  9,989    

Royal Bank of Scotland Group PLC

    8.000%        N/A (3)        Ba2        10,609,516  
  1,476    

Royal Bank of Scotland Group PLC

    7.500%        N/A (3)        Ba2        1,523,970  
  5,100    

Societe Generale SA, 144A

    6.750%        N/A (3)        BB+        4,883,250  
  3,540    

Societe Generale SA, 144A

    8.000%        N/A (3)        BB+        3,801,854  
  7,218    

Societe Generale SA, 144A

    7.875%        N/A (3)        BB+        7,624,013  
  5,675    

Societe Generale SA, 144A, (4)

    7.375%        N/A (3)        BB+        5,965,844  
  5,600    

Standard Chartered PLC, 144A

    7.750%        N/A (3)        Ba1        5,838,000  
  6,330    

Standard Chartered PLC, 144A

    7.500%        N/A (3)        Ba1        6,630,675  
  17,075    

UniCredit SpA

    8.000%        N/A (3)        B+        16,476,897  
  179,593    

Total Banks

                               183,089,237  
      Capital Markets – 5.7%                           
  12,007    

Credit Suisse Group AG, 144A

    7.500%        N/A (3)        BB        12,802,343  
  1,400    

Credit Suisse Group AG

    7.125%        N/A (3)        Ba2        1,451,100  
  2,500    

Macquarie Bank Limited, 144A

    6.125%        N/A (3)        Ba1        2,281,250  
  687    

UBS Group AG

    7.125%        N/A (3)        BBB–        712,763  
  13,710    

UBS Group AG

    7.000%        N/A (3)        BBB–        14,449,819  
  30,304    

Total Capital Markets

                               31,697,275  
      Diversified Financial Services – 1.7%                           
  8,690    

BNP Paribas SA, 144A, (4)

    7.375%        N/A (3)        BBB–        9,233,125  
$ 218,587    

Total Contingent Capital Securities (cost $229,159,772)

                               224,019,637  
Shares     Description (1)   Coupon              Ratings (2)      Value  
 

$25 PAR (OR SIMILAR) RETAIL PREFERRED – 33.1% (23.8% of Total Investments)

 

      Banks – 9.3%                           
  115,900    

AgriBank FCB, (6)

    6.875%           BBB+      $ 12,401,300  
  134,689    

Citigroup Inc., (4)

    7.125%           BB+        3,764,558  
  155,800    

Cobank Agricultural Credit Bank, (6)

    6.250%           BBB+        16,203,200  
  40,797    

Cobank Agricultural Credit Bank, (4), (6)

    6.200%           BBB+        4,242,888  
  107,726    

Fifth Third Bancorp

    6.625%           Baa3        2,938,765  
  154,612    

Huntington Bancshares Inc.

    6.250%           Baa3        4,083,303  
  38,100    

KeyCorp

    6.125%           Baa3        1,031,367  
  192,878    

Regions Financial Corporation, (4)

    6.375%           BB+        5,252,068  
  22,000    

Wells Fargo & Company, (4)

    6.625%           Baa2        604,560  
  41,069    

Zions Bancorporation, (4)

    6.300%                 BB        1,104,345  
 

Total Banks

                               51,626,354  
      Capital Markets – 4.4%                           
  54,600    

Goldman Sachs Group Inc.

    5.500%           Ba1        1,403,220  
  160,656    

Morgan Stanley, (4)

    7.125%           BB+        4,509,614  
  244,100    

Morgan Stanley

    6.875%           BB+        6,676,135  
  143,200    

Morgan Stanley

    6.375%           BB+        3,846,352  
  191,400    

Morgan Stanley

    5.850%           BB+        4,963,002  
  51,800    

Northern Trust Corporation, (4)

    5.850%           BBB+        1,400,154  
  54,750    

State Street Corporation, (4)

    5.350%                 Baa1        1,427,880  
 

Total Capital Markets

                               24,226,357  

 

41


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

 

Shares     Description (1)   Coupon              Ratings (2)      Value  
      Consumer Finance – 0.9%                           
  185,926    

GMAC Capital Trust I

    7.198%                 B+      $ 4,940,054  
      Food Products – 3.3%                           
  185,400    

CHS Inc., (4)

    7.875%           N/R        5,324,688  
  161,100    

CHS Inc.

    7.100%           N/R        4,486,635  
  141,800    

CHS Inc., (4)

    6.750%           N/R        3,804,494  
  24,000    

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

    7.875%           Baa3        2,430,000  
  20,500    

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

    7.875%                 Baa3        2,367,750  
 

Total Food Products

                               18,413,567  
      Insurance – 6.6%                           
  324,957    

Aspen Insurance Holdings Limited, (4)

    5.950%           BBB–        8,335,147  
  62,000    

Aspen Insurance Holdings Limited, (4)

    5.625%           BBB–        1,525,200  
  108,900    

Axis Capital Holdings Limited

    5.500%           BBB        2,705,076  
  61,100    

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

    1.863%           BB+        1,344,200  
  119,500    

Enstar Group Limited

    7.000%           BB+        3,067,565  
  295,125    

Kemper Corporation

    7.375%           Ba1        7,685,055  
  163,333    

Maiden Holdings NA Limited

    7.750%           N/R        3,797,492  
  62,847    

Reinsurance Group of America Inc., (4)

    6.200%           BBB+        1,684,928  
  181,800    

Reinsurance Group of America Inc., (4)

    5.750%           BBB+        4,695,894  
  74,800    

Torchmark Corp, (4)

    6.125%                 BBB+        1,956,020  
 

Total Insurance

                               36,796,577  
      Mortgage Real Estate Investment Trusts – 0.5%                           
  114,600    

Wells Fargo REIT, (4)

    6.375%                 BBB        2,989,914  
      Oil, Gas & Consumable Fuels – 1.3%                           
  84,700    

NuStar Energy LP, (4)

    8.500%           B1        2,036,188  
  206,369    

NuStar Logistics Limited Partnership

    9.082%                 B+        5,276,855  
 

Total Oil, Gas & Consumable Fuels

                               7,313,043  
      Thrifts & Mortgage Finance – 2.5%                           
  103,274    

Federal Agricultural Mortgage Corporation

    6.875%           N/R        2,689,255  
  145,808    

Federal Agricultural Mortgage Corporation

    6.000%           N/R        3,769,137  
  270,100    

New York Community Bancorp Inc., (4)

    6.375%                 Ba1        7,252,185  
 

Total Thrifts & Mortgage Finance

                               13,710,577  
      U.S. Agency – 4.3%                           
  222    

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

    6.750%                 Baa1        23,764,700  
 

Total $25 Par (or similar) Retail Preferred (cost $176,517,492)

                               183,781,143  
 

Total Long-Term Investments (cost $754,948,022) – 138.8%

                               770,481,040  
 

Borrowings – (40.5)% (8), (9)

                               (225,000,000
 

Other Assets Less Liabilities – 1.7% (10)

                               9,576,624  
 

Net Assets Applicable to Common Shares – 100%

                             $ 555,057,664  

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 (11)
    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     $ 4,199,937     $ 4,199,937  

Total unrealized appreciation on interest rate swaps

 

                                                          $ 4,199,937  

 

42


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. Ratings are not covered by the report of independent registered public accounting firm.

 

(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 $177,661,024.

 

(5)

Variable rate security. The rate shown is the coupon as of the end of the reporting period.

 

(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 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)

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 $553,141,090 have been pledged as collateral for borrowings.

 

(9)

Borrowings as a percentage of Total Investments is 29.2%.

 

(10)

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.

 

(11)

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.

 

43


JPS   

Nuveen Preferred & Income
Securities Fund

 

Portfolio of Investments    July 31, 2018

 

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

LONG-TERM INVESTMENTS – 147.1% (97.8% of Total Investments)

 

 

$1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 67.4% (44.9% of Total Investments)

 

      Automobiles – 0.0%                           
$ 1,000    

General Motors Financial Company Inc., (3)

    5.750%        N/A (4)        BB+      $ 982,500  
      Banks – 28.2%                           
  14,300    

Bank of America Corporation

    6.500%        N/A (4)        BBB–        15,336,750  
  16,000    

Bank of America Corporation, (3)

    6.300%        N/A (4)        BBB–        17,040,000  
  12,300    

Bank of America Corporation, (3)

    6.100%        N/A (4)        BBB–        12,819,675  
  1,000    

Bank of Nova Scotia

    4.650%        N/A (4)        BBB–        910,000  
  3,600    

Bank One Capital III, (5)

    8.750%        9/01/30        BBB+        4,909,705  
  7,000    

Citigroup Inc.

    6.250%        N/A (4)        BB+        7,249,270  
  43,000