November 14, 2017
(UPDATE: RA went ex-dividend today: this is a BUY)
Nuveen High Income Target Term Fund JHD
JHD is going ex-dividend today….it is a ‘target maturity’ fund that will close and disburse funds in 2019. So you have a definite maturity date, in contrast to the ‘usual’ open-end bond funds that most people are familiar with….the fund will act like the individual corporate bonds that we own. We like the short duration, closing in two years.
Buy at $10.03 or below. This CEF holds approx. 123 high yield (junk) bonds, so we are taking on risk. Yield is 5.8%.
FUND DESCRIPTION: Nuveen High Income December 2019 Target Term Fund is an exchange-traded closed-end fund (CEF) or a closed-end ETF that is officially described as a diversified, closed-end management investment company.
INVESTMENT OBJECTIVE: The Nuveen High Income December 2019 Target Term Fund seeks to provide a high level of current income and return the original $9.86 net asset value per common share on or about 12/1/2019.
FUND STRATEGY: The Fund invests in a portfolio of primarily below investment grade corporate debt securities. The Fund may invest in other types of securities including senior loans, convertible securities and other types of debt instruments and derivatives that provide comparable economic exposure to the corporate debt market. At least 80% of its managed assets will be in corporate debt securities and separately, at least 80% in securities that, at the time of investment, are rated below investment grade or are unrated but judged by the advisers to be of comparable quality. No more than 15% will be in securities rated CCC+/Caa1 or lower at the time of investment. Up to 30% may be in securities of non-U.S. issuers, including up to 20% in emerging market issuers, and up to 10% may be in non-U.S. dollar denominated securities. The Fund seeks to identify securities across diverse sectors and industries that the advisers believe are undervalued or mispriced. In seeking to return the original NAV on or about the 12/1/2019, the Fund intends to utilize various portfolio and cash flow management techniques, including setting aside a portion of its net investment income, possibly retaining gains and limiting the longest maturity of any holding to no later than 6/1/2019. The Fund may use leverage through Borrowings or by issuing Preferred Shares or other senior securities.
FUND MANAGEMENT: Nuveen Fund Advisors serves as the Fund’s investment adviser. Nuveen Asset Management serves as the sub-adviser to the Fund.