We have audited the accompanying statements of assets and liabilities of Nuveen New York Municipal Value Fund (formerly known as Nuveen New York Municipal Value Fund, Inc.), Nuveen New York Quality Municipal Income
Fund, and Nuveen New York AMT-Free Quality Municipal Income Fund (the Funds), including the portfolios of investments, as of February 28, 2021, the related statements of operations for the year then ended, the statements of changes in net assets
for each of the years in the two-year period then ended, the statements of cash flows (Nuveen New York Quality Municipal Income Fund and Nuveen New York AMT-Free Quality Municipal Income Fund) for the year then ended, and the related notes
(collectively, the financial statements) and the financial highlights for each of the years in the four-year period then ended, the five-month period from October 1, 2016 through February 28, 2017, and the year ended September 30, 2016. In our
opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of February 28, 2021, the results of their operations and their cash flows (where applicable) for the year
then ended, the changes in their net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the four-year period then ended, the five-month period from October 1, 2016 through February
28, 2017, and the year ended September 30, 2016, in conformity with U.S. generally accepted accounting principles.
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 February 28, 2021, by correspondence with custodians 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.
We have served as the auditor of one or more Nuveen investment companies since 2014.
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted.
(2) Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later
dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. Optional Call Provisions are not covered by the report of independent registered public accounting firm.
(3) 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.
(4) Step-up coupon bond, a bond with a coupon that increases (“steps up”), usually at regular intervals, while the bond is outstanding. The rate shown is the coupon as of
the end of the reporting period.
(5) Defaulted security. A security whose issuer has failed to fully pay principal and/or interest when due, or is under the protection of bankruptcy.
(6) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal and interest.
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.
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted.
(2) Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later
dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. Optional Call Provisions are not covered by the report of independent registered public accounting firm.
(3) 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.
(4) Step-up coupon bond, a bond with a coupon that increases (“steps up”), usually at regular intervals, while the bond is outstanding. The rate shown is the coupon as of the
end of the reporting period.
(5) Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in inverse floating rate transactions.
(6) Defaulted security. A security whose issuer has failed to fully pay principal and/or interest when due, or is under the protection of bankruptcy.
(7) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal and interest.
(8) Adjustable Rate MuniFund Term Preferred Shares, net of deferred offering cost as a percentage of Total Investments is 20.6%.
(9) Variable Rate Demand Preferred Shares, net of deferred offering costs as a percentage of Total Investments is 12.4%.
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.
IF Inverse floating rate security issued by a tender option bond (“TOB”) trust, the interest rate on which varies inversely with the Securities Industry Financial Markets
Association (SIFMA) short-term rate, which resets weekly, or a similar short-term rate, and is reduced by the expenses related to the TOB trust.
UB Underlying bond of an inverse floating rate trust reflected as a financing transaction. See Notes to Financial Statements, Note 4 – Portfolio Securities and Investments in
Derivatives for more information.
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to common shares unless otherwise noted.
(2) Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later
dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. Optional Call Provisions are not covered by the report of independent registered public accounting firm.
(3) 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.
(4) Step-up coupon bond, a bond with a coupon that increases (“steps up”), usually at regular intervals, while the bond is outstanding. The rate shown is the coupon as of the
end of the reporting period.
(5) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal and interest.
(6) Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in inverse floating rate transactions.
(7) MuniFund Preferred Shares, net of deferred offering costs as a percentage of Total Investments is 3.9%.
(8) Variable Rate Demand Preferred Shares, net of deferred offering costs as a percentage of Total Investments is 32.4%.
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.
UB Underlying bond of an inverse floating rate trust reflected as a financing transaction. See Notes to Financial Statements, Note 4 – Portfolio Securities and Investments in
Derivatives for more information.
Statement of Assets
and Liabilities
February 28, 2021
|
|
|
|
|
|
|
|
|
|
|
|
NNY
|
|
|
NAN
|
|
|
NRK
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Long-term investments, at value (cost $139,730,696, $663,621,377 and
|
|
|
|
|
|
|
|
|
|
$1,878,340,208, respectively)
|
|
$
|
149,987,238
|
|
|
$
|
712,931,963
|
|
|
$
|
2,044,160,995
|
|
Cash
|
|
|
379,145
|
|
|
|
—
|
|
|
|
—
|
|
Receivable for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
1,509,115
|
|
|
|
8,105,533
|
|
|
|
20,655,262
|
|
Investments sold
|
|
|
2,701,889
|
|
|
|
19,833,577
|
|
|
|
21,931,759
|
|
Other assets
|
|
|
26,121
|
|
|
|
156,869
|
|
|
|
833,273
|
|
Total assets
|
|
|
154,603,508
|
|
|
|
741,027,942
|
|
|
|
2,087,581,289
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash overdraft
|
|
|
—
|
|
|
|
4,835,837
|
|
|
|
5,200,762
|
|
Floating rate obligations
|
|
|
—
|
|
|
|
25,825,000
|
|
|
|
30,800,000
|
|
Payable for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
|
361,477
|
|
|
|
1,473,625
|
|
|
|
3,981,164
|
|
Interest
|
|
|
—
|
|
|
|
46,753
|
|
|
|
38,325
|
|
Investments purchased - regular settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
10,723,213
|
|
Adjustable Rate MuniFund Term Preferred (“AMTP”) Shares, net of deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
offering costs (liquidation preference $—, $147,000,000, and $—, respectively)
|
|
|
—
|
|
|
|
146,912,742
|
|
|
|
—
|
|
MuniFund Preferred (“MFP”) Shares, net of deferred offering costs
|
|
|
|
|
|
|
|
|
|
|
|
|
(liquidation preference $—, $— and $80,000,000, respectively)
|
|
|
—
|
|
|
|
—
|
|
|
|
79,558,583
|
|
Variable Rate Demand Preferred (“VRDP”) Shares, net of deferred offering costs
|
|
|
|
|
|
|
|
|
|
|
|
|
(liquidation preference $—, $89,000,000 and $663,800,000, respectively)
|
|
|
—
|
|
|
|
88,136,640
|
|
|
|
661,389,105
|
|
Accrued expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
55,282
|
|
|
|
339,186
|
|
|
|
909,449
|
|
Directors/Trustees fees
|
|
|
1,691
|
|
|
|
105,255
|
|
|
|
400,933
|
|
Professional fees
|
|
|
24,800
|
|
|
|
31,804
|
|
|
|
42,329
|
|
Other
|
|
|
37,914
|
|
|
|
107,331
|
|
|
|
268,007
|
|
Total liabilities
|
|
|
481,164
|
|
|
|
267,814,173
|
|
|
|
793,311,870
|
|
Net assets applicable to common shares
|
|
$
|
154,122,344
|
|
|
$
|
473,213,769
|
|
|
$
|
1,294,269,419
|
|
Common shares outstanding
|
|
|
15,240,743
|
|
|
|
30,851,332
|
|
|
|
87,235,304
|
|
Net asset value (“NAV”) per common share outstanding
|
|
$
|
10.11
|
|
|
$
|
15.34
|
|
|
$
|
14.84
|
|
|
|
Net assets applicable to common shares consist of:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares, $0.01 par value per share
|
|
$
|
152,407
|
|
|
$
|
308,513
|
|
|
$
|
872,353
|
|
Paid-in surplus
|
|
|
145,430,298
|
|
|
|
435,731,237
|
|
|
|
1,173,735,019
|
|
Total distributable earnings
|
|
|
8,539,639
|
|
|
|
37,174,019
|
|
|
|
119,662,047
|
|
Net assets applicable to common shares
|
|
$
|
154,122,344
|
|
|
$
|
473,213,769
|
|
|
$
|
1,294,269,419
|
|
Authorized shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
250,000,000
|
|
|
Unlimited
|
|
|
Unlimited
|
|
Preferred
|
|
|
N/A
|
|
|
Unlimited
|
|
|
Unlimited
|
|
N/A – Fund is not authorized to issue preferred shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
46
Year Ended February 28, 2021
|
|
|
|
|
|
|
|
|
|
|
|
NNY
|
|
|
NAN
|
|
|
NRK
|
|
Investment Income
|
|
$
|
5,592,095
|
|
|
$
|
28,082,540
|
|
|
$
|
75,670,228
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
701,237
|
|
|
|
4,368,016
|
|
|
|
11,667,607
|
|
Interest expense and amortization of offering costs
|
|
|
5,239
|
|
|
|
2,546,244
|
|
|
|
4,350,121
|
|
Liquidity fees
|
|
|
—
|
|
|
|
689,291
|
|
|
|
5,191,472
|
|
Remarketing fees
|
|
|
—
|
|
|
|
49,074
|
|
|
|
770,510
|
|
Custodian fees
|
|
|
24,960
|
|
|
|
66,459
|
|
|
|
158,631
|
|
Directors/Trustees fees
|
|
|
4,319
|
|
|
|
19,923
|
|
|
|
57,263
|
|
Professional fees
|
|
|
31,536
|
|
|
|
62,755
|
|
|
|
452,326
|
|
Shareholder reporting expenses
|
|
|
16,577
|
|
|
|
38,503
|
|
|
|
72,374
|
|
Shareholder servicing agent fees
|
|
|
11,436
|
|
|
|
26,284
|
|
|
|
31,450
|
|
Stock exchange listing fees
|
|
|
10,500
|
|
|
|
8,319
|
|
|
|
23,519
|
|
Investor relations expenses
|
|
|
7,397
|
|
|
|
32,813
|
|
|
|
97,903
|
|
Merger expenses
|
|
|
51,917
|
|
|
|
—
|
|
|
|
—
|
|
Other
|
|
|
13,957
|
|
|
|
74,460
|
|
|
|
225,250
|
|
Total expenses
|
|
|
879,075
|
|
|
|
7,982,141
|
|
|
|
23,098,426
|
|
Net investment income (loss)
|
|
|
4,713,020
|
|
|
|
20,100,399
|
|
|
|
52,571,802
|
|
Realized and Unrealized Gain (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss) from investments
|
|
|
(579,119
|
)
|
|
|
(3,037,764
|
)
|
|
|
(9,759,606
|
)
|
Change in net unrealized appreciation (depreciation) of investments
|
|
|
(4,430,558
|
)
|
|
|
(19,727,353
|
)
|
|
|
(47,051,572
|
)
|
Net realized and unrealized gain (loss)
|
|
|
(5,009,677
|
)
|
|
|
(22,765,117
|
)
|
|
|
(56,811,178
|
)
|
Net increase (decrease) in net assets applicable to common shares from operations
|
|
$
|
(296,657
|
)
|
|
$
|
(2,664,718
|
)
|
|
$
|
(4,239,376
|
)
|
See accompanying notes to financial statements.
47
Statement of Changes
in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NNY
|
|
|
NAN
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
2/28/21
|
|
|
2/29/20
|
|
|
2/28/21
|
|
|
2/29/20
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss)
|
|
$
|
4,713,020
|
|
|
$
|
5,332,574
|
|
|
$
|
20,100,399
|
|
|
$
|
18,468,038
|
|
Net realized gain (loss) from investments
|
|
|
(579,119
|
)
|
|
|
252,436
|
|
|
|
(3,037,764
|
)
|
|
|
2,074,615
|
|
Change in net unrealized appreciation (depreciation)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of investments
|
|
|
(4,430,558
|
)
|
|
|
8,646,627
|
|
|
|
(19,727,353
|
)
|
|
|
38,930,384
|
|
Net increase (decrease) in net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
applicable to common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations
|
|
|
(296,657
|
)
|
|
|
14,231,637
|
|
|
|
(2,664,718
|
)
|
|
|
59,473,037
|
|
Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
|
|
|
(4,928,826
|
)
|
|
|
(5,389,360
|
)
|
|
|
(19,004,421
|
)
|
|
|
(17,770,367
|
)
|
Decrease in net assets applicable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common shares from distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to common shareholders
|
|
|
(4,928,826
|
)
|
|
|
(5,389,360
|
)
|
|
|
(19,004,421
|
)
|
|
|
(17,770,367
|
)
|
Capital Share Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from shares issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to shareholders due to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
reinvestment of distributions
|
|
|
95,855
|
|
|
|
128,734
|
|
|
|
—
|
|
|
|
—
|
|
Net increase (decrease) in net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
applicable to common shares from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
capital share transactions
|
|
|
95,855
|
|
|
|
128,734
|
|
|
|
—
|
|
|
|
—
|
|
Net increase (decrease) in net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
applicable to common shares
|
|
|
(5,129,628
|
)
|
|
|
8,971,011
|
|
|
|
(21,669,139
|
)
|
|
|
41,702,670
|
|
Net assets applicable to common
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares at the beginning of period
|
|
|
159,251,972
|
|
|
|
150,280,961
|
|
|
|
494,882,908
|
|
|
|
453,180,238
|
|
Net assets applicable to common
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares at the end of period
|
|
$
|
154,122,344
|
|
|
$
|
159,251,972
|
|
|
$
|
473,213,769
|
|
|
$
|
494,882,908
|
|
See accompanying notes to financial statements.
48
|
|
|
|
|
|
|
|
|
NRK
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
2/28/21
|
|
|
2/29/20
|
|
Operations
|
|
|
|
|
|
|
Net investment income (loss)
|
|
$
|
52,571,802
|
|
|
$
|
50,069,479
|
|
Net realized gain (loss) from investments
|
|
|
(9,759,606
|
)
|
|
|
7,134,518
|
|
Change in net unrealized appreciation (depreciation)
|
|
|
|
|
|
|
|
|
of investments
|
|
|
(47,051,572
|
)
|
|
|
106,103,002
|
|
Net increase (decrease) in net assets
|
|
|
|
|
|
|
|
|
applicable to common shares
|
|
|
|
|
|
|
|
|
from operations
|
|
|
(4,239,376
|
)
|
|
|
163,306,999
|
|
Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
Dividends
|
|
|
(49,462,419
|
)
|
|
|
(47,107,066
|
)
|
Decrease in net assets applicable to
|
|
|
|
|
|
|
|
|
common shares from distributions
|
|
|
|
|
|
|
|
|
to common shareholders
|
|
|
(49,462,419
|
)
|
|
|
(47,107,066
|
)
|
Capital Share Transactions
|
|
|
|
|
|
|
|
|
Common shares:
|
|
|
|
|
|
|
|
|
Net proceeds from shares issued
|
|
|
|
|
|
|
|
|
to shareholders due to
|
|
|
|
|
|
|
|
|
reinvestment of distributions
|
|
|
—
|
|
|
|
—
|
|
Net increase (decrease) in net assets
|
|
|
|
|
|
|
|
|
applicable to common shares from
|
|
|
|
|
|
|
|
|
capital share transactions
|
|
|
—
|
|
|
|
—
|
|
Net increase (decrease) in net assets
|
|
|
|
|
|
|
|
|
applicable to common shares
|
|
|
(53,701,795
|
)
|
|
|
116,199,933
|
|
Net assets applicable to common
|
|
|
|
|
|
|
|
|
shares at the beginning of period
|
|
|
1,347,971,214
|
|
|
|
1,231,771,281
|
|
Net assets applicable to common
|
|
|
|
|
|
|
|
|
shares at the end of period
|
|
$
|
1,294,269,419
|
|
|
$
|
1,347,971,214
|
|
See accompanying notes to financial statements.
49
Year Ended February 28, 2021
|
|
|
|
|
|
|
|
|
NAN
|
|
|
NRK
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
Net Increase (Decrease) in Net Assets Applicable to Common Shares from Operations
|
|
$
|
(2,664,718
|
)
|
|
$
|
(4,239,376
|
)
|
Adjustments to reconcile the net increase (decrease) in net assets
|
|
|
|
|
|
|
|
|
applicable to common shares from operations to net cash provided by
|
|
|
|
|
|
|
|
|
(used in) operating activities:
|
|
|
|
|
|
|
|
|
Purchases of investments
|
|
|
(159,487,693
|
)
|
|
|
(435,896,910
|
)
|
Proceeds from sales and maturities of investments
|
|
|
174,729,332
|
|
|
|
445,400,074
|
|
Proceeds from litigation settlement
|
|
|
90
|
|
|
|
90
|
|
Taxes paid
|
|
|
(5,259
|
)
|
|
|
(12,979
|
)
|
Amortization (Accretion) of premiums and discounts, net
|
|
|
4,714,798
|
|
|
|
10,991,679
|
|
Amortization of deferred offering costs
|
|
|
56,645
|
|
|
|
136,923
|
|
(Increase) Decrease in:
|
|
|
|
|
|
|
|
|
Receivable for interest
|
|
|
498,770
|
|
|
|
1,962,387
|
|
Receivable for investments sold
|
|
|
(16,854,292
|
)
|
|
|
(12,105,346
|
)
|
Other assets
|
|
|
(12,538
|
)
|
|
|
(57,104
|
)
|
Increase (Decrease) in:
|
|
|
|
|
|
|
|
|
Payable for interest
|
|
|
(151,176
|
)
|
|
|
(78,944
|
)
|
Payable for investments purchased - regular settlement
|
|
|
—
|
|
|
|
10,723,213
|
|
Accrued management fees
|
|
|
(18,741
|
)
|
|
|
(32,412
|
)
|
Accrued Directors/Trustees fees
|
|
|
20,926
|
|
|
|
73,686
|
|
Accrued professional fees
|
|
|
3,262
|
|
|
|
8,644
|
|
Accrued other expenses
|
|
|
54,960
|
|
|
|
127,162
|
|
Net realized (gain) loss from investments
|
|
|
3,037,764
|
|
|
|
9,759,606
|
|
Change in net unrealized appreciation (depreciation) of investments
|
|
|
19,727,353
|
|
|
|
47,051,572
|
|
Net cash provided by (used in) operating activities
|
|
|
23,649,483
|
|
|
|
73,811,965
|
|
Cash Flow from Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from borrowings
|
|
|
—
|
|
|
|
7,680,164
|
|
(Repayment of) borrowings
|
|
|
—
|
|
|
|
(35,080,164
|
)
|
Increase (Decrease) in cash overdraft
|
|
|
3,708,752
|
|
|
|
4,235,091
|
|
(Repayments of) floating rate obligations
|
|
|
(8,475,000
|
)
|
|
|
(1,440,000
|
)
|
Cash distributions paid to common shareholders
|
|
|
(18,883,235
|
)
|
|
|
(49,207,056
|
)
|
Net cash provided by (used in) financing activities
|
|
|
(23,649,483
|
)
|
|
|
(73,811,965
|
)
|
Net Increase (Decrease) in Cash
|
|
|
|
|
|
|
|
|
Cash at the beginning of period
|
|
|
—
|
|
|
|
—
|
|
Cash at the end of period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Supplemental Disclosure of Cash Flow Information
|
|
NAN
|
|
|
NRK
|
|
Cash paid for interest (excluding amortization of offering costs)
|
|
$
|
2,640,775
|
|
|
$
|
4,292,142
|
|
See accompanying notes to financial statements.
50
THIS PAGE INTENTIONALLY LEFT BLANK
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected data for a common share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
|
|
|
|
|
|
Less Distributions to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
Common Shareholders
|
|
|
Common Share
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
From
|
|
|
|
|
|
Discount
|
|
|
|
|
|
|
|
|
|
Beginning
|
|
|
Net
|
|
|
Realized/
|
|
|
|
|
|
From
|
|
|
Accumu-
|
|
|
|
|
|
Per
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Investment
|
|
|
Unrealized
|
|
|
|
|
|
Net
|
|
|
lated Net
|
|
|
|
|
|
Share
|
|
|
|
|
|
Ending
|
|
|
|
Share
|
|
|
Income
|
|
|
Gain
|
|
|
|
|
|
Investment
|
|
|
Realized
|
|
|
|
|
|
Repurchased
|
|
|
Ending
|
|
|
Share
|
|
|
|
NAV
|
|
|
(Loss)
|
|
|
(Loss)
|
|
|
Total
|
|
|
Income
|
|
|
Gains
|
|
|
Total
|
|
|
and Retired
|
|
|
NAV
|
|
|
Price
|
|
|
|
NNY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended 2/28-2/29:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
$
|
10.46
|
|
|
$
|
0.31
|
|
|
$
|
(0.34
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
—
|
|
|
$
|
(0.32
|
)
|
|
$
|
—
|
|
|
$
|
10.11
|
|
|
$
|
9.63
|
|
2020
|
|
|
9.87
|
|
|
|
0.35
|
|
|
|
0.59
|
|
|
|
0.94
|
|
|
|
(0.35
|
)
|
|
|
—
|
|
|
|
(0.35
|
)
|
|
|
—
|
|
|
|
10.46
|
|
|
|
10.36
|
|
2019
|
|
|
9.81
|
|
|
|
0.36
|
|
|
|
0.06
|
|
|
|
0.42
|
|
|
|
(0.36
|
)
|
|
|
—
|
|
|
|
(0.36
|
)
|
|
|
—
|
|
|
|
9.87
|
|
|
|
9.67
|
|
2018
|
|
|
9.89
|
|
|
|
0.37
|
|
|
|
(0.07
|
)
|
|
|
0.30
|
|
|
|
(0.38
|
)
|
|
|
—
|
|
|
|
(0.38
|
)
|
|
|
—
|
|
|
|
9.81
|
|
|
|
9.26
|
|
2017(d)
|
|
|
10.33
|
|
|
|
0.16
|
|
|
|
(0.44
|
)
|
|
|
(0.28
|
)
|
|
|
(0.16
|
)
|
|
|
—
|
|
|
|
(0.16
|
)
|
|
|
—
|
|
|
|
9.89
|
|
|
|
9.70
|
|
Year Ended 9/30:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
10.01
|
|
|
|
0.41
|
|
|
|
0.30
|
|
|
|
0.71
|
|
|
|
(0.39
|
)
|
|
|
—
|
|
|
|
(0.39
|
)
|
|
|
—
|
|
|
|
10.33
|
|
|
|
10.33
|
|
|
|
NAN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended 2/28-2/29:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
16.04
|
|
|
|
0.65
|
|
|
|
(0.73
|
)
|
|
|
(0.08
|
)
|
|
|
(0.62
|
)
|
|
|
—
|
|
|
|
(0.62
|
)
|
|
|
—
|
|
|
|
15.34
|
|
|
|
13.92
|
|
2020
|
|
|
14.69
|
|
|
|
0.60
|
|
|
|
1.33
|
|
|
|
1.93
|
|
|
|
(0.58
|
)
|
|
|
—
|
|
|
|
(0.58
|
)
|
|
|
—
|
|
|
|
16.04
|
|
|
|
14.43
|
|
2019
|
|
|
14.63
|
|
|
|
0.61
|
|
|
|
0.01
|
|
|
|
0.62
|
|
|
|
(0.58
|
)
|
|
|
—
|
|
|
|
(0.58
|
)
|
|
|
0.02
|
|
|
|
14.69
|
|
|
|
12.87
|
|
2018
|
|
|
14.85
|
|
|
|
0.67
|
|
|
|
(0.19
|
)
|
|
|
0.48
|
|
|
|
(0.70
|
)
|
|
|
—
|
|
|
|
(0.70
|
)
|
|
|
—
|
|
|
|
14.63
|
|
|
|
13.02
|
|
2017(d)
|
|
|
15.78
|
|
|
|
0.29
|
|
|
|
(0.92
|
)
|
|
|
(0.63
|
)
|
|
|
(0.30
|
)
|
|
|
—
|
|
|
|
(0.30
|
)
|
|
|
—
|
|
|
|
14.85
|
|
|
|
13.75
|
|
Year Ended 9/30:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
15.26
|
|
|
|
0.76
|
|
|
|
0.55
|
|
|
|
1.31
|
|
|
|
(0.79
|
)
|
|
|
—
|
*
|
|
|
(0.79
|
)
|
|
|
—
|
|
|
|
15.78
|
|
|
|
15.33
|
|
(a) Total Return Based on Common share NAV is the combination of changes in common share NAV, reinvested dividend income at NAV and reinvested capital gains distributions at
NAV, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending NAV. The actual reinvest price for the last dividend declared in the period
may often be based on the Fund’s market price (and not its NAV), and therefore may be different from the price used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Price is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any,
at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total
returns are not annualized.
* Rounds to less than $0.01 per share.
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Supplemental Data/
|
|
|
|
|
|
|
|
Ratios Applicable to Common Shares
|
|
Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Returns
|
|
|
|
|
|
Ratios to Average Net Assets(b)
|
|
|
|
|
|
|
|
|
|
Based
|
|
|
Ending
|
|
|
|
|
|
|
|
|
|
|
Based
|
|
|
on
|
|
|
Net
|
|
|
|
|
|
Net
|
|
|
Portfolio
|
|
on
|
|
|
Share
|
|
|
Assets
|
|
|
|
|
|
Investment
|
|
|
Turnover
|
|
NAV(a)
|
|
|
Price(a)
|
|
|
|
(000
|
)
|
|
Expenses
|
|
|
Income (Loss)
|
|
|
Rate(c)
|
|
|
(0.17
|
)%
|
|
|
(3.94
|
)%
|
|
$
|
154,122
|
|
|
|
0.57
|
%
|
|
|
3.08
|
%
|
|
|
24
|
%
|
|
9.72
|
|
|
|
10.93
|
|
|
|
159,252
|
|
|
|
0.59
|
|
|
|
3.45
|
|
|
|
7
|
|
|
4.37
|
|
|
|
8.52
|
|
|
|
150,281
|
|
|
|
0.59
|
|
|
|
3.63
|
|
|
|
17
|
|
|
3.01
|
|
|
|
(0.80
|
)
|
|
|
149,313
|
|
|
|
0.60
|
|
|
|
3.69
|
|
|
|
12
|
|
|
(2.71
|
)
|
|
|
(4.54
|
)
|
|
|
150,358
|
|
|
|
0.63
|
**
|
|
|
3.77
|
**
|
|
|
14
|
|
|
7.23
|
|
|
|
10.56
|
|
|
|
156,939
|
|
|
|
0.60
|
|
|
|
4.04
|
|
|
|
15
|
|
|
|
|
|
|
|
|
(0.40
|
)
|
|
|
0.90
|
|
|
|
473,214
|
|
|
|
1.70
|
|
|
|
4.29
|
|
|
|
23
|
|
|
13.33
|
|
|
|
16.81
|
|
|
|
494,883
|
|
|
|
2.34
|
|
|
|
3.90
|
|
|
|
8
|
|
|
4.46
|
|
|
|
3.49
|
|
|
|
453,180
|
|
|
|
2.45
|
|
|
|
4.16
|
|
|
|
23
|
|
|
3.19
|
|
|
|
(0.44
|
)
|
|
|
455,375
|
|
|
|
2.10
|
|
|
|
4.43
|
|
|
|
14
|
|
|
(3.97
|
)
|
|
|
(8.32
|
)
|
|
|
462,128
|
|
|
|
2.01
|
**
|
|
|
4.74
|
**
|
|
|
20
|
|
|
8.77
|
|
|
|
20.51
|
|
|
|
491,272
|
|
|
|
1.62
|
|
|
|
4.86
|
|
|
|
16
|
|
(b) • Net Investment Income (Loss) ratios reflect income earned and expenses incurred on assets attributable to preferred shares issued by the Fund, where applicable.
• The expense ratios reflect, among other things, all interest expense and other costs related to preferred shares (as described in Note 5 – Fund Shares) and/or the interest expense deemed to have
been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund (as described in Note 4 – Portfolio Securities and Investments in Derivatives), where applicable,
as follows:
|
|
|
|
NNY
|
|
NAN
|
|
Year Ended 2/28-2/29:
|
|
Year Ended 2/28-2/29:
|
|
2021
|
—%***
|
2021
|
0.70%
|
2020
|
0.02
|
2020
|
1.33
|
2019
|
0.02
|
2019
|
1.42
|
2018
|
0.03
|
2018
|
1.07
|
2017(d)
|
0.03**
|
2017(d)
|
0.96**
|
Year Ended 9/30:
|
|
Year Ended 9/30:
|
|
2016
|
0.02
|
2016
|
0.65
|
(c) Portfolio Turnover Rate is calculated based on the lesser of long-term purchases or sales (as disclosed in Note 4 – Portfolio Securities and Investments in Derivatives)
divided by the average long-term market value during the period.
(d) For the five months ended February 28, 2017.
** Annualized.
*** Rounds to less than 0.01%.
See accompanying notes to financial statements.
53
|
|
|
|
|
|
|
|
|
|
|
Financial Highlights (continued)
|
|
|
|
|
|
|
|
|
|
Selected data for a common share outstanding throughout each period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less Distributions to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Operations
|
|
|
Common Shareholders
|
|
|
Common Share
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
|
|
|
|
|
From
|
|
|
|
|
|
Discount
|
|
|
|
|
|
|
|
|
|
Beginning
|
|
|
Net
|
|
|
Realized/
|
|
|
|
|
|
From
|
|
|
Accumu-
|
|
|
|
|
|
Per
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Investment
|
|
|
Unrealized
|
|
|
|
|
|
Net
|
|
|
lated Net
|
|
|
|
|
|
Share
|
|
|
|
|
|
Ending
|
|
|
|
Share
|
|
|
Income
|
|
|
Gain
|
|
|
|
|
|
Investment
|
|
|
Realized
|
|
|
|
|
|
Repurchased
|
|
|
Ending
|
|
|
Share
|
|
|
|
NAV
|
|
|
(Loss)
|
|
|
(Loss)
|
|
|
Total
|
|
|
Income
|
|
|
Gains
|
|
|
Total
|
|
|
and Retired
|
|
|
NAV
|
|
|
Price
|
|
NRK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended 2/28-2/29:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
$
|
15.45
|
|
|
$
|
0.60
|
|
|
$
|
(0.64
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.57
|
)
|
|
$
|
—
|
|
|
$
|
(0.57
|
)
|
|
$
|
—
|
|
|
$
|
14.84
|
|
|
$
|
13.44
|
|
2020
|
|
|
14.12
|
|
|
|
0.57
|
|
|
|
1.30
|
|
|
|
1.87
|
|
|
|
(0.54
|
)
|
|
|
—
|
|
|
|
(0.54
|
)
|
|
|
—
|
|
|
|
15.45
|
|
|
|
13.72
|
|
2019
|
|
|
14.01
|
|
|
|
0.57
|
|
|
|
0.07
|
|
|
|
0.64
|
|
|
|
(0.54
|
)
|
|
|
—
|
|
|
|
(0.54
|
)
|
|
|
0.01
|
|
|
|
14.12
|
|
|
|
12.36
|
|
2018
|
|
|
14.21
|
|
|
|
0.62
|
|
|
|
(0.20
|
)
|
|
|
0.42
|
|
|
|
(0.62
|
)
|
|
|
—
|
|
|
|
(0.62
|
)
|
|
|
—
|
|
|
|
14.01
|
|
|
|
12.31
|
|
2017(d)
|
|
|
15.17
|
|
|
|
0.27
|
|
|
|
(0.96
|
)
|
|
|
(0.69
|
)
|
|
|
(0.27
|
)
|
|
|
—
|
|
|
|
(0.27
|
)
|
|
|
—
|
|
|
|
14.21
|
|
|
|
12.93
|
|
Year Ended 9/30:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
14.36
|
|
|
|
0.69
|
|
|
|
0.82
|
|
|
|
1.51
|
|
|
|
(0.70
|
)
|
|
|
—
|
|
|
|
(0.70
|
)
|
|
|
—
|
|
|
|
15.17
|
|
|
|
14.12
|
|
(a) Total Return Based on Common Share NAV is the combination of changes in common share NAV, reinvested dividend income at NAV and reinvested capital gains distributions at
NAV, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending NAV. The actual reinvest price for the last dividend declared in the period
may often be based on the Fund’s market price (and not its NAV), and therefore may be different from the price used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Price is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any,
at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total
returns are not annualized.
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Supplemental Data/
|
|
|
|
|
|
|
|
Ratios Applicable to Common Shares
|
|
Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Returns
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets(b)
|
|
|
|
|
|
|
|
|
|
Based
|
|
|
Ending
|
|
|
|
|
|
|
|
|
|
|
Based
|
|
|
on
|
|
|
Net
|
|
|
|
|
|
Net
|
|
|
Portfolio
|
|
on
|
|
|
Share
|
|
|
Assets
|
|
|
|
|
|
Investment
|
|
|
Turnover
|
|
NAV(a)
|
|
|
Price(a)
|
|
|
|
(000
|
)
|
|
Expenses
|
|
|
Income (Loss)
|
|
|
Rate(c)
|
|
|
|
|
(0.16
|
)%
|
|
|
2.31
|
%
|
|
$
|
1,294,269
|
|
|
|
1.80
|
%
|
|
|
4.10
|
%
|
|
|
22
|
%
|
|
13.47
|
|
|
|
15.57
|
|
|
|
1,347,971
|
|
|
|
2.33
|
|
|
|
3.89
|
|
|
|
12
|
|
|
4.75
|
|
|
|
5.01
|
|
|
|
1,231,771
|
|
|
|
2.51
|
|
|
|
4.08
|
|
|
|
21
|
|
|
2.90
|
|
|
|
(0.18
|
)
|
|
|
1,227,358
|
|
|
|
2.13
|
|
|
|
4.28
|
|
|
|
13
|
|
|
(4.52
|
)
|
|
|
(6.49
|
)
|
|
|
1,244,673
|
|
|
|
2.03
|
*
|
|
|
4.60
|
*
|
|
|
13
|
|
|
10.71
|
|
|
|
18.04
|
|
|
|
1,329,069
|
|
|
|
1.55
|
|
|
|
4.66
|
|
|
|
10
|
|
(b) • Net Investment Income (Loss) ratios reflect income earned and expenses incurred on assets attributable to preferred shares issued by the Fund, where applicable.
• The expense ratios reflect, among other things, all interest expense and other costs related to preferred shares (as described in Note 5 – Fund Shares) and/or the interest expense deemed to have
been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund (as described in Note 4 – Portfolio Securities and Investments in Derivatives), where applicable,
as follows:
|
|
NRK
|
|
Year Ended 2/28-2/29:
|
|
2021
|
0.80%
|
2020
|
1.37
|
2019
|
1.52
|
2018
|
1.14
|
2017(d)
|
1.02*
|
Year Ended 9/30:
|
|
2016
|
0.62
|
(c) Portfolio Turnover Rate is calculated based on the lesser of long-term purchases or sales (as disclosed in Note 4 – Portfolio Securities and Investments in Derivatives)
divided by the average long-term market value during the period.
(d) For the five months ended February 28, 2017.
* Annualized.
See accompanying notes to financial statements.
55
Financial Highlights (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iMTP, MFP,
|
|
|
|
|
|
|
|
|
|
|
|
AMTP, VMTP
|
|
|
|
|
|
|
|
|
|
|
|
and/or
|
|
AMTP Shares
|
iMTP Shares
|
MFP Shares
|
VMTP Shares
|
VRDP Shares
|
VRDP Shares
|
|
at the
|
at the
|
at the
|
at the
|
at the
|
at the End
|
|
End of Period
|
End of Period
|
End of Period
|
End of Period
|
End of Period
|
of Period
|
|
Aggregate
|
Asset
|
Aggregate
|
Asset
|
Aggregate
|
Asset
|
Aggregate
|
Asset
|
Aggregate
|
Asset
|
Asset
|
|
Amount
|
Coverage
|
Amount
|
Coverage
|
Amount
|
Coverage
|
Amount
|
Coverage
|
Amount
|
Coverage
|
Coverage
|
|
Out-
|
Per
|
Out-
|
Per
|
Out-
|
Per
|
Out-
|
Per
|
Out-
|
Per
|
Per $1
|
|
standing
|
$100,000
|
standing
|
$5,000
|
standing
|
$100,000
|
standing
|
$100,000
|
standing
|
$100,000
|
Liquidation
|
|
(000)
|
Share
|
(000)
|
Share
|
(000)
|
Share
|
(000)
|
Share
|
(000)
|
Share
|
Preference
|
|
NAN
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended 2/28-2/29:
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
$147,000
|
$300,514
|
$ —
|
$ —
|
$ —
|
$ —
|
$ —
|
$ —
|
$ 89,000
|
$300,514
|
$3.01
|
2020
|
147,000
|
309,696
|
—
|
—
|
—
|
—
|
—
|
—
|
89,000
|
309,696
|
3.10
|
2019
|
147,000
|
292,026
|
—
|
—
|
—
|
—
|
—
|
—
|
89,000
|
292,026
|
2.92
|
2018
|
—
|
—
|
—
|
—
|
—
|
—
|
147,000
|
292,955
|
89,000
|
292,955
|
2.93
|
2017(a)
|
—
|
—
|
—
|
—
|
—
|
—
|
147,000
|
295,834
|
89,000
|
295,834
|
2.96
|
Year Ended 9/30:
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
—
|
—
|
—
|
—
|
—
|
—
|
147,000
|
308,166
|
89,000
|
308,166
|
3.08
|
|
NRK
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended 2/28-2/29:
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
—
|
—
|
—
|
—
|
80,000
|
274,008
|
—
|
—
|
663,800
|
274,008
|
2.74
|
2020
|
—
|
—
|
—
|
—
|
80,000
|
281,228
|
—
|
—
|
663,800
|
281,228
|
2.81
|
2019
|
—
|
—
|
—
|
—
|
80,000
|
265,605
|
—
|
—
|
663,800
|
265,605
|
2.66
|
2018
|
—
|
—
|
—
|
—
|
80,000
|
265,012
|
—
|
—
|
663,800
|
265,012
|
2.65
|
2017(a)
|
—
|
—
|
79,000
|
13,378
|
—
|
—
|
—
|
—
|
663,800
|
267,565
|
2.68
|
Year Ended 9/30:
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
—
|
—
|
79,000
|
13,946
|
—
|
—
|
—
|
—
|
663,800
|
278,927
|
2.79
|
|
(a) For the five months ended February 28, 2017.
|
|
|
|
|
See accompanying notes to financial statements.
56
Notes to
Financial Statements
1. General Information
Fund Information
The funds covered in this report and their corresponding New York Stock Exchange (“NYSE”) symbols are as follows (each a “Fund” and collectively, the “Funds”):
• Nuveen New York Municipal Value Fund (NNY) (formerly Nuveen New York Municipal Value Fund, Inc.)
• Nuveen New York Quality Municipal Income Fund (NAN)
• Nuveen New York AMT-Free Quality Municipal Income Fund (NRK)
The Funds are registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, as diversified closed-end management investment companies. NNY was incorporated under the state laws of Minnesota on July
14, 1987. NAN and NRK were organized as Massachusetts business trusts on December 1, 1998 and April 9, 2002, respectively.
The end of the reporting period for the Funds is February 28, 2021, and the period covered by these Notes to Financial Statements is the fiscal year ended February 28, 2021 (the “current fiscal period”).
Investment Adviser and Sub-Adviser
The Funds’ investment adviser is Nuveen Fund Advisors, LLC (the “Adviser”), a subsidiary of Nuveen, LLC (“Nuveen”). Nuveen is the investment management arm of Teachers Insurance and Annuity Association of America
(TIAA). The Adviser has overall responsibility for management of the Funds, oversees the management of the Funds’ portfolios, manages the Funds’ business affairs and provides certain clerical, bookkeeping and other administrative services, and, if
necessary, asset allocation decisions. The Adviser has entered into sub-advisory agreements with Nuveen Asset Management, LLC (the “Sub-Adviser”), a subsidiary of the Adviser, under which the Sub-Adviser manages the investment portfolios of the
Funds.
Fund Merger
During August 2020, the Funds’ Board of Directors/Trustees (the “Board”) of Nuveen New York Municipal Value Fund 2 (NYV) and NNY approved the merger of NYV (the “Target Fund”) into NNY (the “Acquiring Fund”) (the
“Merger”). The Merger is intended to create one larger fund with lower operating expenses and increased trading volume on the exchange for common shares. The Merger was approved by shareholders of the Target Fund at a special meeting on January 15,
2021, and was completed before the opening of business on April 12, 2021 (subsequent to the close of this reporting period). See Note 9, Subsequent Events for further details.
Other Matters
The outbreak of the novel coronavirus (“COVID-19”) and subsequent global pandemic began significantly impacting the U.S. and global financial markets and economies during the calendar quarter ended March 31, 2020. The
worldwide spread of COVID-19 has created significant uncertainty in the global economy. The duration and extent of COVID-19 over the long term cannot be reasonably estimated at this time. The ultimate impact of COVID-19 and the extent to which
COVID-19 impacts the Funds’ normal course of business, results of operations, investments, and cash flows will depend on future developments, which are highly uncertain and difficult to predict. Management continues to monitor and evaluate this
situation.
2. Significant Accounting Policies
The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require the use of estimates made by management
and the evaluation of subsequent events. Actual results may differ from those estimates. Each Fund is an investment company and follows the accounting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
946, Financial Services—Investment Companies. The net asset value (“NAV”) for financial reporting purposes may differ from the NAV for processing security and common share transactions. The NAV for financial reporting purposes includes security and
common share transactions through the date of the report. Total return is computed based on the NAV used for processing security and common share transactions. The following is a summary of the significant accounting policies consistently followed
by the Funds.
Compensation
The Funds pay no compensation directly to those of its directors/trustees who are affiliated with the Adviser or to its officers, all of whom receive remuneration for their services to the Funds from the Adviser or
its affiliates. The Board has adopted a deferred compensation plan for independent directors/trustees that enables directors/trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain
Nuveen-advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen-advised funds.
57
Notes to Financial Statements (continued)
Distributions to Common Shareholders
Distributions to common shareholders are recorded on the ex-dividend date. The amount, character and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S.
GAAP.
Indemnifications
Under the Funds’ organizational documents, their officers and directors/trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal
course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that
have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.
Investments and Investment Income
Securities transactions are accounted for as of the trade date for financial reporting purposes. Realized gains and losses on securities transactions are based upon the specific identification method. Investment
income is comprised of interest income, which is recorded on an accrual basis and includes accretion of discounts and amortization of premiums for financial reporting purposes. Investment income also reflects payment-in-kind (“PIK”) interest and
paydown gains and losses, if any. PIK interest represents income received in the form of securities in lieu of cash.
Netting Agreements
In the ordinary course of business, the Funds may enter into transactions subject to enforceable International Swaps and Derivatives Association, Inc. (ISDA) master agreements or other similar arrangements (“netting
agreements”). Generally, the right to offset in netting agreements allows each Fund to offset certain securities and derivatives with a specific counterparty, when applicable, as well as any collateral received or delivered to that counterparty
based on the terms of the agreements. Generally, each Fund manages its cash collateral and securities collateral on a counterparty basis.
The Funds’ investments subject to netting agreements as of the end of the reporting period, if any, are further described in Note 4 – Portfolio Securities and Investments in Derivatives.
New Accounting Pronouncements and Rule Issuances
Reference Rate Reform
In March 2020, FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The main objective of the new guidance is to
provide relief to companies that will be impacted by the expected change in benchmark interest rates at the end of 2021, when participating banks will no longer be required to submit London Interbank Offered Rate (LIBOR) quotes by the UK Financial
Conduct Authority (FCA). The new guidance allows companies to, provided the only changes to existing contracts are a change to an approved benchmark interest rate, account for modifications as a continuance of the existing contract without
additional analysis. For new and existing contracts, the Funds may elect to apply the optional expedients as of March 12, 2020 through December 31, 2022. Management has not yet elected to apply the optional expedients, but is currently assessing
the impact of the ASU’s adoption to the Funds’ financial statements and various filings.
Securities and Exchange Commission (“SEC”) Adopts New Rules to Modernize Fund Valuation Framework
In December 2020, the SEC voted to adopt a new rule governing fund valuation practices. New Rule 2a-5 under the 1940 Act establishes requirements for determining fair value in good faith for purposes of the 1940 Act.
Rule 2a-5 will permit fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of
Section 2(a)(41) of the 1940 Act, which requires a fund to fair value a security when market quotation are not readily available. The SEC also adopted new Rule 31a-4 under the 1940 Act, which sets forth the recordkeeping requirements associated
with fair value determinations. Finally, the SEC is rescinding previously issued guidance on related issues, including the role of a board in determining fair value and the accounting and auditing of fund investments. Rule 2a-5 and Rule 31a-4
became effective on March 8, 2021, with a compliance date of September 8, 2022. A fund may voluntarily comply with the rules after the effective date, and in advance of the compliance date, under certain conditions. Management is currently
assessing the impact of these provisions on the Funds’ financial statements.
3. Investment Valuation and Fair Value Measurements
The Funds’ investments in securities are recorded at their estimated fair value utilizing valuation methods approved by the Board. Fair value is defined as the price that would be received upon selling an investment
or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. U.S. GAAP establishes the three-tier hierarchy which is used to maximize the use of observable market
data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability.
Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect management’s assumptions about the assumptions market
58
participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The following is a summary of the three-tiered hierarchy of valuation
input levels.
Level 1 – Inputs are unadjusted and prices are determined using quoted prices in active markets for identical securities.
Level 2 – Prices are determined using other significant observable inputs (including quoted prices for similar securities, interest rates, credit spreads, etc.).
Level 3 – Prices are determined using significant unobservable inputs (including management’s assumptions in determining the fair value of investments).
Prices of fixed-income securities are generally provided by an independent pricing service (“pricing service”) approved by the Board. The pricing service establishes a security’s fair value using methods that may
include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or
collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. In pricing certain securities, particularly less liquid and lower quality securities, the pricing service
may consider information about a security, its issuer or market activity, provided by the Adviser. These securities are generally classified as Level 2.
Any portfolio security or derivative for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued at fair value, as determined in
good faith using procedures approved by the Board. As a general principle, the fair value of a security would appear to be the amount that the owner might reasonably expect to receive for it in a current sale. A variety of factors may be considered
in determining the fair value of such securities, which may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from
security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. To the extent the inputs are observable and
timely, the values would be classified as Level 2 of the fair value hierarchy; otherwise they would be classified as Level 3.
The following table summarizes the market value of the Funds’ investments as of the end of the reporting period, based on the inputs used to value them:
|
|
|
|
|
|
|
|
|
|
|
|
|
NNY
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Long-Term Investments*:
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal Bonds
|
|
$
|
—
|
|
|
$
|
149,987,238
|
|
|
$
|
—
|
|
|
$
|
149,987,238
|
|
NAN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Investments*:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal Bonds
|
|
$
|
—
|
|
|
$
|
712,931,963
|
|
|
$
|
—
|
|
|
$
|
712,931,963
|
|
NRK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Investments*:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal Bonds
|
|
$
|
—
|
|
|
$
|
2,044,160,995
|
|
|
$
|
—
|
|
|
$
|
2,044,160,995
|
|
* Refer to the Fund’s Portfolio of Investments for industry classifications.
4. Portfolio Securities and Investments in Derivatives
Portfolio Securities
Inverse Floating Rate Securities
Each Fund is authorized to invest in inverse floating rate securities. An inverse floating rate security is created by depositing a municipal bond (referred to as an “Underlying Bond”), typically with a fixed interest
rate, into a special purpose tender option bond (“TOB”) trust (referred to as the “TOB Trust”) created by or at the direction of one or more Funds. In turn, the TOB Trust issues (a) floating rate certificates (referred to as “Floaters”), in face
amounts equal to some fraction of the Underlying Bond’s par amount or market value, and (b) an inverse floating rate certificate (referred to as an “Inverse Floater”) that represents all remaining or residual interest in the TOB Trust. Floaters
typically pay short-term tax-exempt interest rates to third parties who are also provided a right to tender their certificate and receive its par value, which may be paid from the proceeds of a remarketing of the Floaters, by a loan to the TOB
Trust from a third party liquidity provider (“Liquidity Provider”), or by the sale of assets from the TOB Trust. The Inverse Floater is issued to a long term investor, such as one or more of the Funds. The income received by the Inverse Floater
holder varies inversely with the short-term rate paid to holders of the Floaters, and in most circumstances the Inverse Floater holder bears substantially all of the Underlying Bond’s downside investment risk and also benefits disproportionately
from any potential appreciation of the Underlying Bond’s value. The value of an Inverse Floater will be more volatile than that of the Underlying Bond because the interest rate is dependent on not only the fixed coupon rate of the Underlying Bond
but also on the short-term interest paid on the Floaters, and because the Inverse Floater essentially bears the risk of loss (and possible gain) of the greater face value of the Underlying Bond.
59
Notes to Financial Statements (continued)
The Inverse Floater held by a Fund gives the Fund the right to (a) cause the holders of the Floaters to tender their certificates at par (or slightly more than par in certain circumstances), and (b) have the trustee
of the TOB Trust (the “Trustee”) transfer the Underlying Bond held by the TOB Trust to the Fund, thereby collapsing the TOB Trust.
The Fund may acquire an Inverse Floater in a transaction where it (a) transfers an Underlying Bond that it owns to a TOB Trust created by a third party or (b) transfers an Underlying Bond that it owns, or that it has
purchased in a secondary market transaction for the purpose of creating an Inverse Floater, to a TOB Trust created at its direction, and in return receives the Inverse Floater of the TOB Trust (referred to as a “self-deposited Inverse Floater”). A
Fund may also purchase an Inverse Floater in a secondary market transaction from a third party creator of the TOB Trust without first owning the Underlying Bond (referred to as an “externally-deposited Inverse Floater”).
An investment in a self-deposited Inverse Floater is accounted for as a “financing” transaction (i.e., a secured borrowing). For a self-deposited Inverse Floater, the Underlying Bond deposited into the TOB Trust is
identified in the Fund’s Portfolio of Investments as “(UB) – Underlying bond of an inverse floating rate trust reflected as a financing transaction,” with the Fund recognizing as liabilities, labeled “Floating rate obligations” on the Statement of
Assets and Liabilities, (a) the liquidation value of Floaters issued by the TOB Trust, and (b) the amount of any borrowings by the TOB Trust from a Liquidity Provider to enable the TOB Trust to purchase outstanding Floaters in lieu of a
remarketing. In addition, the Fund recognizes in “Investment Income” the entire earnings of the Underlying Bond, and recognizes (a) the interest paid to the holders of the Floaters or on the TOB Trust’s borrowings, and (b) other expenses related to
remarketing, administration, trustee, liquidity and other services to a TOB Trust, as a component of “Interest expense and amortization of offering costs” on the Statement of Operations. Earnings due from the Underlying Bond and interest due to the
holders of the Floaters as of the end of the reporting period are recognized as components of “Receivable for interest” and “Payable for interest” on the Statement of Assets and Liabilities, respectively.
In contrast, an investment in an externally-deposited Inverse Floater is accounted for as a purchase of the Inverse Floater and is identified in the Fund’s Portfolio of Investments as “(IF) – Inverse floating rate
investment.” For an externally-deposited Inverse Floater, a Fund’s Statement of Assets and Liabilities recognizes the Inverse Floater and not the Underlying Bond as an asset, and the Fund does not recognize the Floaters, or any related borrowings
from a Liquidity Provider, as a liability. Additionally, the Fund reflects in “Investment Income” only the net amount of earnings on the Inverse Floater (net of the interest paid to the holders of the Floaters or the Liquidity Provider as lender,
and the expenses of the Trust), and does not show the amount of that interest paid or the expenses of the TOB Trust as described above as interest expense on the Statement of Operations.
Fees paid upon the creation of a TOB Trust for self-deposited Inverse Floaters and externally-deposited Inverse Floaters are recognized as part of the cost basis of the Inverse Floater and are capitalized over the
term of the TOB Trust.
As of the end of the reporting period, the aggregate value of Floaters issued by each Fund’s TOB Trust for self-deposited Inverse Floaters and externally-deposited Inverse Floaters was as follows:
|
|
|
|
|
|
|
|
|
|
Floating Rate Obligations Outstanding
|
|
NNY
|
|
|
NAN
|
|
|
NRK
|
|
Floating rate obligations: self-deposited Inverse Floaters
|
|
$
|
—
|
|
|
$
|
25,825,000
|
|
|
$
|
30,800,000
|
|
Floating rate obligations: externally-deposited Inverse Floaters
|
|
|
—
|
|
|
|
13,950,000
|
|
|
|
—
|
|
Total
|
|
$
|
—
|
|
|
$
|
39,775,000
|
|
|
$
|
30,800,000
|
|
During the current fiscal period, the average amount of Floaters (including any borrowings from a Liquidity Provider) outstanding, and the average annual interest rate and fees related to self-deposited Inverse
Floaters, were as follows:
|
|
|
|
|
|
|
|
|
|
Self-Deposited Inverse Floaters
|
|
NNY
|
|
|
NAN
|
|
|
NRK
|
|
Average floating rate obligations outstanding
|
|
$
|
161,315
|
|
|
$
|
26,568,014
|
|
|
$
|
30,926,247
|
|
Average annual interest rate and fees
|
|
|
3.25
|
%
|
|
|
0.97
|
%
|
|
|
0.95
|
%
|
TOB Trusts are supported by a liquidity facility provided by a Liquidity Provider pursuant to which the Liquidity Provider agrees, in the event that Floaters are (a) tendered to the Trustee for remarketing and the
remarketing does not occur, or (b) subject to mandatory tender pursuant to the terms of the TOB Trust agreement, to either purchase Floaters or to provide the Trustee with an advance from a loan facility to fund the purchase of Floaters by the TOB
Trust. In certain circumstances, the Liquidity Provider may otherwise elect to have the Trustee sell the Underlying Bond to retire the Floaters that were tendered and not remarketed prior to providing such a loan. In these circumstances, the
Liquidity Provider remains obligated to provide a loan to the extent that the proceeds of the sale of the Underlying Bond is not sufficient to pay the purchase price of the Floaters.
The size of the commitment under the loan facility for a given TOB Trust is at least equal to the balance of that TOB Trust’s outstanding Floaters plus any accrued interest. In consideration of the loan facility, fee
schedules are in place and are charged by the Liquidity Provider(s). Any loans made by the Liquidity Provider will be secured by the purchased Floaters held by the TOB Trust. Interest paid on any outstanding loan balances will be effectively borne
by the Fund that owns the Inverse Floaters of the TOB Trust that has incurred the borrowing and may be at a rate that is greater than the rate that would have been paid had the Floaters been successfully remarketed.
60
As described above, any amounts outstanding under a liquidity facility are recognized as a component of “Floating rate obligations” on the Statement of Assets and Liabilities by the Fund holding the corresponding
Inverse Floaters issued by the borrowing TOB Trust. As of the end of the reporting period, there were no loans outstanding under any such facility.
Each Fund may also enter into shortfall and forbearance agreements (sometimes referred to as a “recourse arrangement”) (TOB Trusts involving such agreements are referred to herein as “Recourse Trusts”), under which a
Fund agrees to reimburse the Liquidity Provider for the Trust’s Floaters, in certain circumstances, for the amount (if any) by which the liquidation value of the Underlying Bond held by the TOB Trust may fall short of the sum of the liquidation
value of the Floaters issued by the TOB Trust plus any amounts borrowed by the TOB Trust from the Liquidity Provider, plus any shortfalls in interest cash flows. Under these agreements, a Fund’s potential exposure to losses related to or on an
Inverse Floater may increase beyond the value of the Inverse Floater as a Fund may potentially be liable to fulfill all amounts owed to holders of the Floaters or the Liquidity Provider. Any such shortfall amount in the aggregate is recognized as
“Unrealized depreciation on Recourse Trusts” on the Statement of Assets and Liabilities.
As of the end of the reporting period, each Fund’s maximum exposure to the Floaters issued by Recourse Trusts for self-deposited Inverse Floaters and externally-deposited Inverse Floaters was as follows:
|
|
|
|
|
|
|
|
|
|
Floating Rate Obligations — Recourse Trusts
|
|
NNY
|
|
|
NAN
|
|
|
NRK
|
|
Maximum exposure to Recourse Trusts: self-deposited Inverse Floaters
|
|
$
|
—
|
|
|
$
|
25,825,000
|
|
|
$
|
30,800,000
|
|
Maximum exposure to Recourse Trusts: externally-deposited Inverse Floaters
|
|
|
—
|
|
|
|
13,950,000
|
|
|
|
—
|
|
Total
|
|
$
|
—
|
|
|
$
|
39,775,000
|
|
|
$
|
30,800,000
|
|
Zero Coupon Securities
A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Income to the holder of the security comes from accretion of the difference between the original purchase
price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest
periodically.
|
|
|
|
Investment Transactions
|
|
|
|
Long-term purchases and sales (including maturities) during the current fiscal period were as follows:
|
|
|
|
|
|
NNY
|
|
|
NAN
|
|
|
NRK
|
|
Purchases
|
|
$
|
36,577,349
|
|
|
$
|
159,487,693
|
|
|
$
|
435,896,910
|
|
Sales and maturities
|
|
|
39,171,944
|
|
|
|
174,729,332
|
|
|
|
445,400,074
|
|
The Funds may purchase securities on a when-issued or delayed-delivery basis. Securities purchased on a when-issued or delayed-delivery basis may have extended settlement periods; interest income is not accrued until
settlement date. Any securities so purchased are subject to market fluctuation during this period. The Funds have earmarked securities in their portfolios with a current value at least equal to the amount of the when-issued/delayed-delivery
purchase commitments. If a Fund has outstanding when-issued/delayed-delivery purchases commitments as of the end of the reporting period, such amounts are recognized on the Statement of Assets and Liabilities.
Investments in Derivatives
In addition to the inverse floating rate securities in which each Fund may invest, which are considered portfolio securities for financial reporting purposes, each Fund is authorized to invest in certain other
derivative instruments such as futures, options and swap contracts. Each Fund limits its investments in futures, options on futures and swap contracts to the extent necessary for the Adviser to claim the exclusion from registration by the Commodity
Futures Trading Commission as a commodity pool operator with respect to the Fund. The Funds record derivative instruments at fair value, with changes in fair value recognized on the Statement of Operations, when applicable. Even though the Funds’
investments in derivatives may represent economic hedges, they are not considered to be hedge transactions for financial reporting purposes.
Although the Funds are authorized to invest in derivative instruments and may do so in the future, they did not make any such investments during the current fiscal period.
Market and Counterparty Credit Risk
In the normal course of business each Fund may invest in financial instruments and enter into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the
other party to the transaction to perform (counterparty credit risk). The potential loss could exceed the value of the financial assets recorded on the financial statements. Financial assets, which potentially expose each Fund to counterparty
credit risk, consist principally of cash due from counterparties on forward, option and swap transactions, when applicable. The extent of each Fund’s exposure to counterparty credit risk in respect to these financial assets approximates their
carrying value as recorded on the Statement of Assets and Liabilities.
61
Notes to Financial Statements (continued)
Each Fund helps manage counterparty credit risk by entering into agreements only with counterparties the Adviser believes have the financial resources to honor their obligations and by having the Adviser monitor the
financial stability of the counterparties. Additionally, counterparties may be required to pledge collateral daily (based on the daily valuation of the financial asset) on behalf of each Fund with a value approximately equal to the amount of any
unrealized gain above a pre-determined threshold. Reciprocally, when each Fund has an unrealized loss, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the
unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the valuations fluctuate, either up or down, by at least the pre-determined threshold amount.
5. Fund Shares
Common Share Transactions
Transactions in common shares for the Funds during the Funds’ current and prior fiscal period, where applicable, were as follows:
|
|
|
|
NNY
|
|
|
Year
|
Year
|
|
Ended
|
Ended
|
|
2/28/21
|
2/29/20
|
|
Common shares:
|
|
|
Issued to shareholders due to reinvestment of distributions
|
9,453
|
12,634
|
Preferred Shares
Adjustable Rate MuniFund Term Preferred Shares
NAN has issued and has outstanding Adjustable Rate MuniFund Term Preferred (“AMTP”) Shares, with a $100,000 liquidation preference per share.
AMTP Shares are issued via private placement and are not publicly available.
|
|
|
|
|
The details of NAN’s AMTP Shares outstanding as of the end of the reporting period, were as follows:
|
|
|
|
|
|
|
|
Liquidation
|
|
|
|
|
Preference,
|
|
|
|
|
net of
|
|
|
Shares
|
Liquidation
|
deferred
|
Fund
|
Series
|
Outstanding
|
Preference
|
offering costs
|
|
NAN
|
2028
|
1,470
|
$147,000,000
|
$146,912,742
|
The Fund is obligated to redeem its AMTP Shares by the date as specified in its offering document (“Term Redemption Date”), unless earlier redeemed by the Fund. AMTP Shares are subject to optional and mandatory
redemption in certain circumstances. The AMTP Shares may be redeemed at the option of the Fund, subject to payment of premium for approximately six months following the date of issuance (“Premium Expiration Date”), and at the redemption price per
share thereafter. The redemption price per share is equal to the sum of the liquidation preference per share plus any accumulated but unpaid dividends.
AMTP Shares are short-term or short/intermediate-term instruments that pay a variable dividend rate tied to a short-term index, plus an additional fixed “spread” amount which is initially established at the time of
issuance and may be adjusted in the future based upon a mutual agreement between the majority owner and the Fund. From time-to-time the majority owner may propose to the Fund an adjustment to the dividend rate. Should the majority owner and the
Fund fail to agree upon an adjusted dividend rate, and such proposed dividend rate adjustment is not withdrawn, the Fund will be required to redeem all outstanding shares upon the end of a notice period.
In addition, the Fund may be obligated to redeem a certain amount of the AMTP Shares if the Fund fails to maintain certain asset coverage and leverage ratio requirements and such failures are not cured by the
applicable cure date. The Term Redemption Date and Premium Expiration Date for the Fund’s AMTP Shares are as follows:
|
|
|
|
|
|
Notice
|
|
Term
|
Premium
|
Fund
|
Period
|
Series
|
Redemption Date
|
Expiration Date
|
NAN
|
360-day
|
2028
|
December 1, 2028*
|
November 30, 2019
|
* Subject to early termination by either the Fund or the holder.
|
|
|
|
|
62
The average liquidation preference of AMTP Shares outstanding and annualized dividend rate for the Fund during the current fiscal period were as follows:
|
|
|
|
|
|
NAN
|
|
Average liquidation preference of AMTP Shares outstanding
|
|
$
|
147,000,000
|
|
Annualized dividend rate
|
|
|
1.22
|
%
|
AMTP Shares are subject to restrictions on transfer, generally do not trade, and market quotations are generally not available. The fair value of AMTP Shares is expected to be approximately their liquidation
preference so long as the fixed “spread” on the AMTP Shares remains roughly in line with the “spread” being demanded by investors on instruments having similar terms in the current market environment. In present market conditions, the Funds’
Adviser has determined that the fair value of AMTP Shares is approximately their liquidation preference, but their fair value could vary if market conditions change materially. For financial reporting purposes, the liquidation preference of AMTP
Shares is a liability and is recognized as a component of “Adjustable Rate MuniFund Term Preferred (“AMTP”) Shares, net of deferred offering costs” on the Statement of Assets and Liabilities.
AMTP Share dividends are treated as interest payments for financial reporting purposes. Unpaid dividends on AMTP Shares are recognized as a component of “Interest payable” on the Statement of Assets and Liabilities.
Dividends accrued on AMTP Shares are recognized as a component of “Interest expense and amortization of offering costs” on the Statement of Operations.
Costs incurred in connection with the Fund’s offering of AMTP Shares were recorded as deferred charges which are amortized over the life of the shares and are recognized as components of “Adjustable Rate MuniFund Term
Preferred (“AMTP”) Shares, net of deferred offering costs” on the Statement of Assets and Liabilities and “Interest expense and amortization of offering costs” on the Statement of Operations.
MuniFund Preferred Shares
NRK has issued and has outstanding MuniFund Preferred (“MFP”) Shares, with a $100,000 liquidation preference per share. These MFP Shares were issued via private placement and are not publically available.
The Fund is obligated to redeem its MFP Shares by the date as specified in its offering documents (“Term Redemption Date”), unless earlier redeemed by the Fund. MFP Shares are initially issued in a pre-specified mode,
however, MFP Shares can be subsequently designated as an alternative mode at a later date at the discretion of the Fund. The modes within MFP Shares detail the dividend mechanics and are described as follows. At a subsequent date, the Fund may
establish additional mode structures with the MFP Share.
• Variable Rate Remarketed Mode (“VRRM”) – Dividends for MFP Shares within this mode will be established by a remarketing agent; therefore, the market value of the MFP Shares
is expected to approximate its liquidation preference. Shareholders have the ability to request a best-efforts tender of their shares upon seven days notice. If the remarketing agent is unable to identify an alternative purchaser, the shares will
be retained by the shareholder requesting tender and the subsequent dividend rate will increase to its step-up dividend rate. If after one consecutive year of unsuccessful remarketing attempts, the Fund will be required to designate an alternative
mode or redeem the shares.
The Fund will pay a remarketing fee on the aggregate principal amount of all MFP Shares while designated in VRRM. Payments made by the Fund to the remarketing agent are recognized as “Remarketing
fees” on the Statement of Operations.
• Variable Rate Mode (“VRM”) – Dividends for MFP Shares designated in this mode are based upon a short-term index plus an additional fixed “spread” amount established at the
time of issuance or renewal / conversion of its mode. At the end of the period of the mode, the Fund will be required to either extend the term of the mode, designate an alternative mode or redeem the MFP Shares.
The fair value of MFP Shares while in VRM are expected to approximate their liquidation preference so long as the fixed “spread” on the shares remains roughly in line with the “spread” being
demanded by investors on instruments having similar terms in the current market. In current market conditions, the Adviser has determined that the fair value of the shares are approximately their liquidation preference, but their fair value could
vary if market conditions change materially.
• Variable Rate Demand Mode (“VRDM”) – Dividends for MFP Shares designated in this mode will be established by a remarketing agent; therefore, the market value of the MFP
Shares is expected to approximate its liquidation preference. While in this mode, shares will have an unconditional liquidity feature that enables its shareholders to require a liquidity provider, with which the Fund has entered into a contractual
agreement, to purchase shares in the event that the shares are not able to be successfully remarketed. In the event that shares within this mode are unable to be successfully remarketed and are purchased by the liquidity provider, the dividend rate
will be the maximum rate which is designed to escalate according to a specified schedule in order to enhance the remarketing agent’s ability to successfully remarket the shares. The Fund is required to redeem any shares that are still owned by a
liquidity provider after six months of continuous, unsuccessful remarketing.
The Fund will pay a liquidity and remarketing fee on the aggregate principal amount of all MFP Shares while within VRDM. Payments made by the Fund to the liquidity provider and remarketing agent are
recognized as “Liquidity fees” and “Remarketing fees”, respectively, on the Statement of Operations.
63
Notes to Financial Statements (continued)
For financial reporting purposes, the liquidation preference of MFP Shares is recorded as a liability and is recognized as a component of “MuniFund Preferred (“MFP”) Shares, net of deferred offering costs” on the
Statement of Assets and Liabilities. Dividends on the MFP shares are treated as interest payments for financial reporting purposes. Unpaid dividends on MFP shares are recognized as a component on “Interest payable” on the Statement of Assets and
Liabilities. Dividends accrued on MFP Shares are recognized as a component of “Interest expense and amortization of offering costs” on the Statement of Operations.
Subject to certain conditions, MFP Shares may be redeemed, in whole or in part, at any time at the option of the Fund. The Fund may also be required to redeem certain MFP shares if the Fund fails to maintain certain
asset coverage requirements and such failures are not cured by the applicable cure date. The redemption price per share in all circumstances is equal to the liquidation preference per share plus any accumulated but unpaid dividends.
Costs incurred in connection with the Fund’s offering of MFP Shares were recorded as deferred charges which are amortized over the life of the shares. These offering costs are recognized as a component of “MuniFund
Preferred (“MFP”) Shares, net of deferred offering costs” on the Statement of Assets and Liabilities and “Interest expense and amortization of offering costs” on the Statement of Operations.
|
|
|
|
|
|
|
|
As of the end of the reporting period, details of the Fund’s MFP Shares outstanding were as follows:
|
|
|
|
|
|
|
|
|
Liquidation
|
|
|
|
|
|
|
|
Preference,
|
|
|
|
|
|
Shares
|
Liquidation
|
net of deferred
|
Term
|
|
Mode
|
Fund
|
Series
|
Outstanding
|
Preference
|
offering costs
|
Redemption Date
|
Mode
|
Termination Date
|
|
NRK
|
A
|
800
|
$80,000,000
|
$79,558,583
|
May 1, 2047
|
VRRM
|
May 1, 2047
|
The average liquidation preference of MFP Shares outstanding and annualized dividend rate for the Fund during the current fiscal period were as follows:
|
|
NRK
|
|
Average liquidation preference of MFP Shares outstanding
|
|
$
|
80,000,000
|
|
Annualized dividend rate
|
|
|
0.96
|
%
|
Variable Rate Demand Preferred Shares
The following Funds have issued and have outstanding Variable Rate Demand Preferred (“VRDP”) Shares, with a $100,000 liquidation preference per share. VRDP Shares are issued via private placement and are not publicly
available.
As of the end of the reporting period, NAN and NRK had $88,136,640 and $661,389,105 VRDP Shares at liquidation preference, net of deferred offering costs, respectively. Further details of each Fund’s VRDP Shares
outstanding as of the end of the reporting period, were as follows:
|
|
|
|
|
|
|
|
Shares
|
Remarketing
|
Liquidation
|
|
Fund
|
Series
|
Outstanding
|
Fees*
|
Preference
|
Maturity
|
|
NAN
|
1
|
890
|
0.05%
|
$ 89,000,000
|
March 1, 2040
|
|
NRK
|
|
|
|
|
|
|
1
|
1,123
|
0.10%
|
$112,300,000
|
August 1, 2040
|
|
2
|
1,648
|
0.10%
|
$164,800,000
|
August 1, 2040
|
|
3
|
1,617
|
0.10%
|
$161,700,000
|
December 1, 2040
|
|
4
|
500
|
0.10%
|
$ 50,000,000
|
June 1, 2040
|
|
5
|
1,750
|
0.05%
|
$175,000,000
|
June 1, 2046
|
* Remarketing fees as a percentage of the aggregate principal amount of all VRDP Shares outstanding for each series.
|
|
|
VRDP Shares include a liquidity feature that allows VRDP shareholders to have their shares purchased by a liquidity provider with whom each Fund has contracted in the event that the VRDP Shares are not able to be
successfully remarketed. Each Fund is required to redeem any VRDP Shares that are still owned by the liquidity provider after six months of continuous, unsuccessful remarketing. Each Fund pays an annual remarketing fee on the aggregate principal
amount of all VRDP Shares outstanding. Each Fund’s VRDP Shares have successfully remarketed since issuance.
Dividends on the VRDP Shares (which are treated as interest payments for financial reporting purposes) are set at a rate established by a remarketing agent; therefore, the market value of the VRDP Shares is expected
to approximate its liquidation preference. In the event that VRDP Shares are unable to be successfully remarketed, the dividend rate will be the maximum rate which is designed to escalate according to a specified schedule in order to enhance the
remarketing agent’s ability to successfully remarket the VRDP Shares.
Subject to certain conditions, VRDP Shares may be redeemed, in whole or in part, at any time at the option of each Fund. Each Fund may also redeem certain of the VRDP Shares if the Fund fails to maintain certain asset
coverage requirements and such failures are not cured by the applicable cure date. The redemption price per share is equal to the sum of the liquidation preference per share plus any accumulated but unpaid dividends.
64
The average liquidation preference of VRDP Shares outstanding and annualized dividend rate for each Fund during the current fiscal period were as follows:
|
|
|
|
NAN
|
NRK
|
Average liquidation preference of VRDP Shares outstanding
|
$89,000,000
|
$663,800,000
|
Annualized dividend rate
|
0.50%
|
0.47%
|
For financial reporting purposes, the liquidation preference of VRDP Shares is a liability and is recognized as a component of “Variable Rate Demand Preferred (“VRDP”) Shares, net of deferred offering costs” on the
Statement of Assets and Liabilities. Unpaid dividends on VRDP Shares are recognized as a component of “Interest payable” on the Statement of Assets and Liabilities, when applicable. Dividends accrued on VRDP Shares are recognized as a component of
“Interest expense and amortization of offering costs” on the Statement of Operations. Costs incurred by the Funds in connection with their offerings of VRDP Shares were recorded as a deferred charge, which are amortized over the life of the shares
and are recognized as a component of “Variable Rate Demand Preferred (“VRDP”) Shares, net of deferred offering costs” on the Statement of Assets and Liabilities and “Interest expense and amortization of offerings costs” on the Statement of
Operations. In addition to interest expense, each Fund also pays a per annum liquidity fee to the liquidity provider, as well as a remarketing fee, which are recognized as “Liquidity fees” and “Remarketing fees,” respectively, on the Statement of
Operations.
Preferred Share Transactions
The Funds did not have any transactions in preferred shares during the current or prior fiscal period.
6. Income Tax Information
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all of its net investment income and net capital gains to shareholders and to otherwise comply with the
requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions that will enable interest from
municipal securities, which is exempt from regular federal and New York state income taxes, and in the case of NRK the alternative minimum tax applicable to individuals, to retain such tax-exempt status when distributed to shareholders of the
Funds. Net realized capital gains and ordinary income distributions paid by the Funds are subject to federal taxation.
For all open tax years and all major taxing jurisdictions, management of the Funds has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Open
tax years are those that are open for examination by taxing authorities (i.e., generally the last four tax year ends and the interim tax period since then). Furthermore, management of the Funds is also not aware of any tax positions for which it is
reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to the timing differences in recognizing taxable
market discount, timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate securities reflected as financing transactions, if any. To the extent that differences
arise that are permanent in nature, such amounts are reclassified within the capital accounts as detailed below. Temporary differences do not require reclassification. Temporary and permanent differences do not impact the NAVs of the Funds.
The table below presents the cost and unrealized appreciation (depreciation) of each Fund’s investment portfolio, as determined on a federal income tax basis, as of February 28, 2021.
|
|
|
|
|
|
|
|
|
|
|
|
NNY
|
|
|
NAN
|
|
|
NRK
|
|
Tax cost of investments
|
|
$
|
139,722,132
|
|
|
$
|
637,683,104
|
|
|
$
|
1,847,410,459
|
|
Gross unrealized:
|
|
|
|
|
|
|
|
|
|
|
|
|
Appreciation
|
|
$
|
10,687,326
|
|
|
$
|
51,378,844
|
|
|
$
|
167,961,805
|
|
Depreciation
|
|
|
(422,220
|
)
|
|
|
(1,955,006
|
)
|
|
|
(2,011,342
|
)
|
Net unrealized appreciation (depreciation) of investments
|
|
$
|
10,265,106
|
|
|
$
|
49,423,838
|
|
|
$
|
165,950,463
|
|
Permanent differences, primarily due to federal taxes paid, taxable market discount, nondeductible reorganization expenses and nondeductible offering costs, resulted in reclassifications among the Funds’ components of
common share net assets as of February 28, 2021, the Funds’ tax year end.
65
Notes to Financial Statements (continued)
The tax components of undistributed net tax-exempt income, net ordinary income and net long-term capital gains as of February 28, 2021, the Funds’ tax year end, were as follows:
|
|
|
|
|
NNY
|
NAN
|
NRK
|
Undistributed net tax-exempt income1
|
$291,429
|
$3,193,093
|
$7,322,275
|
Undistributed net ordinary income2
|
38,473
|
138,647
|
80,224
|
Undistributed net long-term capital gains
|
—
|
—
|
—
|
1 Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on February 1,2021, and paid on March 1, 2021.
2 Net ordinary income consists of taxable market discount income and net short-term capital gains, if any.
The tax character of distributions paid during the Funds’ tax years ended February 28, 2021 and February 29, 2020 was designated for purposes of the dividends paid deduction as follows:
|
|
|
|
2021
|
NNY
|
NAN
|
NRK
|
Distributions from net tax-exempt income3
|
$4,884,130
|
$18,825,298
|
$49,044,789
|
Distributions from net ordinary income2
|
44,696
|
179,123
|
417,630
|
Distributions from net long-term capital gains
|
—
|
—
|
—
|
|
2020
|
NNY
|
NAN
|
NRK
|
Distributions from net tax-exempt income
|
$5,036,413
|
$22,519,144
|
$57,391,580
|
Distributions from net ordinary income2
|
383,031
|
408,337
|
836,663
|
Distributions from net long-term capital gains
|
—
|
—
|
—
|
2 Net ordinary income consists of taxable market discount income and net short-term capital gains, if any.
3 The Funds hereby designate these amounts paid during the fiscal year ended February 28, 2021, as Exempt Interest Dividends.
As of February 28, 2021, the Funds’ tax year end, the Funds had unused capital losses carrying forward available for federal income tax purposes to be applied against future capital gains, if any. The capital losses
are not subject to expiration.
|
|
|
|
|
NNY
|
NAN
|
NRK
|
Not subject to expiration:
|
|
|
|
Short-term
|
$1,417,804
|
$12,367,799
|
$49,503,620
|
Long-term
|
248,926
|
1,609,490
|
—
|
Total
|
$1,666,730
|
$13,977,289
|
$49,503,620
|
|
7. Management Fees and Other Transactions with Affiliates
|
|
|
|
Management Fees
Each Fund’s management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Sub-Adviser is compensated for its services to the Funds from the
management fees paid to the Adviser.
Each Fund’s management fee consists of two components — a fund-level fee, based only on the amount of assets within each individual Fund, and a complex-level fee, based on the aggregate amount of all eligible fund
assets managed by the Adviser and for NNY a gross interest income component. This pricing structure enables Fund shareholders to benefit from growth in the assets within their respective Fund as well as from growth in the amount of complex-wide
assets managed by the Adviser.
NNY pays an annual fund-level fee, payable monthly, of 0.15% of the average daily net assets of the Fund, as well as 4.125% of the gross interest income (excluding interest on bonds underlying a “self-deposited
inverse floater” trust that is attributed to the Fund over and above the net interest earned on the inverse floater itself) of the Fund.
66
|
|
The annual fund-level fee, payable monthly, for each Fund (excluding NNY) is calculated according to the following schedule:
|
|
|
NAN
|
|
NRK
|
Average Daily Managed Assets*
|
Fund-Level Fee Rate
|
For the first $125 million
|
0.4500%
|
For the next $125 million
|
0.4375
|
For the next $250 million
|
0.4250
|
For the next $500 million
|
0.4125
|
For the next $1 billion
|
0.4000
|
For the next $3 billion
|
0.3750
|
For managed assets over $5 billion
|
0.3625
|
The annual complex-level fee, payable monthly, for each Fund is calculated by multiplying the current complex-wide fee rate, determined according to the following schedule by the Fund’s daily managed assets (net
assets for NNY):
|
|
Complex-Level Eligible Asset Breakpoint Level*
|
Effective Complex-Level Fee Rate at Breakpoint Level
|
$55 billion
|
0.2000%
|
$56 billion
|
0.1996
|
$57 billion
|
0.1989
|
$60 billion
|
0.1961
|
$63 billion
|
0.1931
|
$66 billion
|
0.1900
|
$71 billion
|
0.1851
|
$76 billion
|
0.1806
|
$80 billion
|
0.1773
|
$91 billion
|
0.1691
|
$125 billion
|
0.1599
|
$200 billion
|
0.1505
|
$250 billion
|
0.1469
|
$300 billion
|
0.1445
|
* For the complex-level fees, managed assets include closed-end fund assets managed by the Adviser that are attributable to certain types of leverage. For these purposes,
leverage includes the funds’ use of preferred stock and borrowings and certain investments in the residual interest certificates (also called inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held
by a TOB trust that has been effectively financed by the trust’s issuance of floating rate securities, subject to an agreement by the Adviser as to certain funds to limit the amount of such assets for determining managed assets in certain
circumstances. The complex-level fee is calculated based upon the aggregate daily managed assets of all Nuveen open-end and closed-end funds that constitute “eligible assets.” Eligible assets do not include assets attributable to investments in
other Nuveen funds or assets in excess of a determined amount (originally $2 billion) added to the Nuveen fund complex in connection with the Adviser’s assumption of the management of the former First American Funds effective January 1, 2011, but
do include certain assets of certain Nuveen funds that were reorganized into funds advised by an affiliate of the Adviser during the 2019 calendar year. As of February 28, 2021, the complex-level fee for each Fund was 0.1558%.
Other Transactions with Affiliates
Each Fund is permitted to purchase or sell securities from or to certain other funds or accounts managed by the Sub-Adviser (“Affiliated Entity”) under specified conditions outlined in procedures adopted by the Board
(“cross-trade”). These procedures have been designed to ensure that any cross-trade of securities by the Fund from or to an Affiliated Entity by virtue of having a common investment adviser (or affiliated investment adviser), common officer and/or
common trustee complies with Rule 17a-7 under the 1940 Act. These transactions are effected at the current market price (as provided by an independent pricing service) without incurring broker commissions.
During the current fiscal period, the Funds engaged in cross-trades pursuant to these procedures as follows:
|
|
|
|
Cross-Trades
|
NNY
|
NAN
|
NRK
|
Purchases
|
$2,679,358
|
$26,923,548
|
$78,651,068
|
Sales
|
1,985,820
|
27,000,008
|
76,421,129
|
67
Notes to Financial Statements (continued)
8. Borrowing Arrangements
Committed Line of Credit
The Funds, along with certain other funds managed by the Adviser (“Participating Funds”), have established a 364-day, $2.405 billion standby credit facility with a group of lenders, under which the Participating Funds
may borrow for various purposes other than leveraging for investment purposes. Each Participating Fund is allocated a designated proportion of the facility’s capacity (and its associated costs, as described below) based upon a multi-factor
assessment of the likelihood and frequency of its need to draw on the facility, the size of the Fund and its anticipated draws, and the potential importance of such draws to the operations and well-being of the Fund, relative to those of the other
Funds. A Fund may effect draws on the facility in excess of its designated capacity if and to the extent that other Participating Funds have undrawn capacity. The credit facility expires in June 2021 unless extended or renewed.
The credit facility has the following terms: a 0.10% upfront fee, 0.15% per annum on unused commitment amounts and a drawn interest rate equal to the higher of (a) one-month LIBOR (London Inter-Bank Offered Rate) plus
1.25% (1.00% prior to June 24, 2020) per annum or (b) the Fed Funds rate plus 1.25% (1.00% prior to June 24, 2020) per annum on amounts borrowed. Participating Funds paid administration, legal and arrangement fees, which are recognized as a
component of “Other expenses” on the Statement of Operations, and along with commitment fees, have been allocated among such Participating Funds based upon the relative proportions of the facility’s aggregate capacity reserved for them and other
factors deemed relevant by the Adviser and the Board of each Participating Fund.
During the current fiscal period, the following Fund utilized this facility. The Fund’s maximum outstanding balance during the utilization period was as follows:
|
|
|
NRK
|
Maximum outstanding balance
|
$27,400,000
|
During the Fund’s utilization period(s) during the current fiscal period, the average daily balance outstanding and average annual interest rate on the
|
Borrowings were as follows:
|
|
|
|
|
NRK
|
Utilization period (days outstanding)
|
35
|
Average daily balance outstanding
|
$16,472,019
|
Average annual interest rate
|
1.94%
|
Borrowings outstanding as of the end of the reporting period are recognized as “Borrowings” on the Statement of Assets and Liabilities. NNY and NAN did not utilize this facility during the current fiscal period.
Inter-Fund Borrowing and Lending
The SEC has granted an exemptive order permitting registered open-end and closed-end Nuveen funds to participate in an inter-fund lending facility whereby the Nuveen funds may directly lend to and borrow money from
each other for temporary purposes (e.g., to satisfy redemption requests or when a sale of securities “fails,” resulting in an unanticipated cash shortfall) (the “Inter-Fund Program”). The closed-end Nuveen funds, including the Funds covered by this
shareholder report, will participate only as lenders, and not as borrowers, in the Inter-Fund Program because such closed-end funds rarely, if ever, need to borrow cash to meet redemptions. The Inter-Fund Program is subject to a number of
conditions, including, among other things, the requirements that (1) no fund may borrow or lend money through the Inter-Fund Program unless it receives a more favorable interest rate than is typically available from a bank or other financial
institution for a comparable transaction; (2) no fund may borrow on an unsecured basis through the Inter-Fund Program unless the fund’s outstanding borrowings from all sources immediately after the inter-fund borrowing total 10% or less of its
total assets; provided that if the borrowing fund has a secured borrowing outstanding from any other lender, including but not limited to another fund, the inter-fund loan must be secured on at least an equal priority basis with at least an
equivalent percentage of collateral to loan value; (3) if a fund’s total outstanding borrowings immediately after an inter-fund borrowing would be greater than 10% of its total assets, the fund may borrow through the inter-fund loan on a secured
basis only; (4) no fund may lend money if the loan would cause its aggregate outstanding loans through the Inter-Fund Program to exceed 15% of its net assets at the time of the loan; (5) a fund’s inter-fund loans to any one fund shall not exceed 5%
of the lending fund’s net assets; (6) the duration of inter-fund loans will be limited to the time required to receive payment for securities sold, but in no event more than seven days; and (7) each inter-fund loan may be called on one business
day’s notice by a lending fund and may be repaid on any day by a borrowing fund. In addition, a Nuveen fund may participate in the Inter-Fund Program only if and to the extent that such participation is consistent with the fund’s investment
objective and investment policies. The Board is responsible for overseeing the Inter-Fund Program.
The limitations detailed above and the other conditions of the SEC exemptive order permitting the Inter-Fund Program are designed to minimize the risks associated with Inter-Fund Program for both the lending fund and
the borrowing fund. However, no borrowing or lending activity is without risk. When a fund borrows money from another fund, there is a risk that the loan could be called on one day’s notice or not renewed, in which case the fund may have
68
to borrow from a bank at a higher rate or take other actions to payoff such loan if an inter-fund loan is not available from another fund. Any delay in repayment to a lending fund could result in a lost investment
opportunity or additional borrowing costs.
During the current reporting period, none of the Funds covered by this shareholder report have entered into any inter-fund loan activity.
9. Subsequent Events
Fund Merger
As noted in the Note 1 – General Information, before the opening of business on April 12, 2021 NYV merged into NNY. The net assets of NYV were $37,121,360 prior to the closing of the Merger.
Upon the closing of the Merger, NYV transferred its assets to NNY in exchange for common shares of NNY and the assumption by NNY of the liabilities of NYV. NYV was then liquidated, dissolved and terminated in
accordance with its Declaration of Trust. Shareholders of NYV became shareholders on NNY. Holders of common shares of NYV received newly issued common shares of NNY, the aggregate NAV of which is equal to the aggregate NAV of the common shares of
NYV held immediately prior to the Merger (including for this purpose fractional Acquiring Fund shares to which shareholders would be entitled).
In conjunction with the Merger, Shareholders of NNY approved a change of domicile reorganization from a Minnesota corporation to a Massachusetts business trust during March 2021. Upon completion of the change of
domicile, NNY removed “Inc.” from its name and became Nuveen New York Municipal Value Fund.
69
Shareholder Update
(Unaudited)
CURRENT INVESTMENT OBJECTIVES, INVESTMENT POLICIES AND PRINCIPAL RISKS OF THE FUNDS
NUVEEN NEW YORK MUNICIPAL VALUE FUND
(formerly known as NUVEEN NEW YORK MUNICIPAL VALUE FUND, INC). (NNY)
Investment Objectives
The Fund’s primary investment objective is to provide, through investment in a professionally managed portfolio of tax-exempt New York municipal obligations, current interest income exempt from both federal and New
York State and New York City personal income taxes. The Fund’s secondary investment objective is to achieve enhancement of portfolio value through investments in tax-exempt New York municipal obligations that, in the opinion of the Fund’s
investment adviser and/or the Fund’s sub-adviser, are underrated or represent municipal market sectors that are undervalued.
Investment Policies
As a fundamental policy, under normal circumstances, the Fund will invest at least 80% of its Assets (as defined below) in municipal securities and other related investments, the income from which is exempt from
regular federal, New York State and New York City income taxes.
“Assets” mean the net assets of the Fund plus the amount of any borrowings for investment purposes. “Managed Assets” mean the total assets of the Fund, minus the sum of its accrued liabilities (other than Fund
liabilities incurred for the express purpose of creating leverage). Total assets for this purpose shall include assets attributable to the Fund’s use of leverage (whether or not those assets are reflected in the Fund’s financial statements for
purposes of generally accepted accounting principles), and derivatives will be valued at their market value.
Under normal circumstances:
• The Fund will invest at least 80% of its Managed Assets in municipal securities that, at the time of investment, are rated within the four highest grades (Baa or BBB or
better) by at least one NRSRO or are unrated but judged to be of comparable quality by the Fund’s investment adviser and/or the Fund’s sub-adviser. Investment grade securities may include securities that, at the time of investment, are rated below
investment grade, so long as at least one NRSRO rates such securities within the four highest grades (such securities are commonly referred to as split-rated securities).
• The Fund may invest up to 20% of its Managed Assets in municipal securities that at the time of investment are rated below investment grade or are unrated but judged to be
of comparable quality by the Fund’s investment adviser and/or the Fund’s sub-adviser.
• No more than 10% of the Fund’s Managed Assets may be invested in municipal securities rated below B3/B- by all NRSROs that rate the security or that are unrated but judged
to be of comparable quality by the Fund’s investment adviser and/or the Fund’s sub-adviser.
• The Fund may invest up to 20% of its Managed Assets in municipal securities that pay interest that is taxable under the federal alternative minimum tax applicable to
individuals.
• The Fund will not invest more than 25% of its total assets in municipal securities in any one industry.
• The Fund may invest up to 10% of its Managed Assets in securities of other open- or closed-end investment companies (including ETFs) that invest primarily in municipal
securities of the types in which the Fund may invest directly.
• The Fund may invest in distressed securities but may not invest in the securities of an issuer which, at the time of investment, is in default on its obligations to pay
principal or interest thereon when due or that is involved in a bankruptcy proceeding (i.e., rated below C-, at the time of investment); provided, however, that the Fund’s investment adviser and/or the
Fund’s sub-adviser may determine that it is in the best interest of shareholders in pursuing a workout arrangement with issuers of defaulted securities to make loans to the defaulted issuer or another party, or purchase a debt, equity or other
interest from the defaulted issuer or another party, or take other related or similar steps involving the investment of additional monies, but only if that issuer’s securities are already held by the Fund.
The foregoing policies apply only at the time of any new investment.
Approving Changes in Investment Policies
The Board of Trustees of the Fund may change the policies described above without a shareholder vote. However, the Fund’s (i) investment objectives, (ii) policy of investing at least at least 80% of its Assets in
municipal securities and other related investments, the income from which is exempt from regular federal, New York State and New York City income taxes and (iii) policy (as described below) that it will not leverage its capital structure by issuing
senior securities such as Preferred Shares or debt instruments, may not be changed without the approval of the holders of a majority of the outstanding common shares and preferred shares voting together as a single class, and the approval of the
holders of a majority of the outstanding preferred shares, voting separately as a single class. A “majority of the outstanding” shares means (i) 67% or more of the shares present at a meeting, if the holders of more than 50% of the shares are
present or represented by proxy or (ii) more than 50% of the shares, whichever is less.
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Portfolio Contents
The Fund invests in various municipal securities, including municipal bonds and notes, other securities issued to finance and refinance public projects, and other related securities and derivative instruments creating
exposure to municipal bonds, notes and securities that provide for the payment of interest income that is exempt from federal, New York State and New York City income tax.
Municipal securities include municipal bonds, notes, securities issued to finance and refinance public projects, certificates of participation, variable rate demand obligations, lease obligations, municipal notes,
pre-refunded municipal bonds, private activity bonds, securities issued by TOB trusts, including inverse floating rate securities, and other forms of municipal bonds and securities, and other related instruments that create exposure to municipal
bonds, notes and securities that provide for the payment of interest income that is exempt from regular U.S. federal income tax and New York State and New York City income taxes.
Municipal securities are debt obligations generally issued by states, cities and local authorities and certain possessions and territories of the United States (such as Puerto Rico and Guam) to finance or refinance
public purpose projects such as roads, schools, and water supply systems.
The Fund may also invest in AMT Bonds. AMT Bonds may trigger adverse tax consequences for Fund shareholders who are subject to the federal alternative minimum tax.
The municipal securities in which the Fund invests are generally issued by the State of New York, a municipality of New York, or a political subdivision of either, and pay interest that, in the opinion of bond counsel
to the issuer (or on the basis of other authority believed by Nuveen Asset Management to be reliable), is exempt from regular federal, New York State and New York City income taxes, although the interest may be subject to the federal alternative
minimum tax. The Fund may invest in municipal securities issued by U.S. territories (such as Puerto Rico or Guam) that are exempt from regular federal, New York State and New York City income taxes.
The Fund may invest in municipal securities that represent lease obligations and certificates of participation in such leases. A municipal lease is an obligation in the form of a lease or installment purchase that is
issued by a state or local government to acquire equipment and facilities. Income from such obligations generally is exempt from state and local taxes in the state of issuance. A certificate of participation represents an undivided interest in an
unmanaged pool of municipal leases, an installment purchase agreement or other instruments. The certificates typically are issued by a municipal agency, a trust or other entity that has received an assignment of the payments to be made by the state
or political subdivision under such leases or installment purchase agreements. Such certificates provide the Fund with the right to a pro rata undivided interest in the underlying municipal securities. In
addition, such participations generally provide the Fund with the right to demand payment, on not more than seven days’ notice, of all or any part of the Fund’s participation interest in the underlying municipal securities, plus accrued interest.
The Fund may invest in municipal notes. Municipal securities in the form of notes generally are used to provide for short-term capital needs, in anticipation of an issuer’s receipt of other revenues or financing, and
typically have maturities of up to three years. Such instruments may include tax anticipation notes, revenue anticipation notes, bond anticipation notes, tax and revenue anticipation notes and construction loan notes. Tax anticipation notes are
issued to finance the working capital needs of governments. Generally, they are issued in anticipation of various tax revenues, such as income, sales, property, use and business taxes, and are payable from these specific future taxes. Revenue
anticipation notes are issued in expectation of receipt of other kinds of revenue, such as federal revenues available under federal revenue sharing programs. Bond anticipation notes are issued to provide interim financing until long-term bond
financing can be arranged. In most cases, the long-term bonds then provide the funds needed for repayment of the bond anticipation notes. Tax and revenue anticipation notes combine the funding sources of both tax anticipation notes and revenue
anticipation notes. Construction loan notes are sold to provide construction financing. Mortgage notes insured by the Federal Housing Authority secure these notes; however, the proceeds from the insurance may be less than the economic equivalent of
the payment of principal and interest on the mortgage note if there has been a default. The anticipated revenues from taxes, grants or bond financing generally secure the obligations of an issuer of municipal notes.
The Fund may invest in “tobacco settlement bonds.” Tobacco settlement bonds are municipal securities that are secured or payable solely from the collateralization of the proceeds from class action or other litigation
against the tobacco industry.
The Fund may invest in pre-refunded municipal securities. The principal of and interest on pre-refunded municipal securities are no longer paid from the original revenue source for the securities. Instead, the source
of such payments is typically an escrow fund consisting of U.S. government securities. The assets in the escrow fund are derived from the proceeds of refunding bonds issued by the same issuer as the pre-refunded municipal securities. Issuers of
municipal securities use this advance refunding technique to obtain more favorable terms with respect to securities that are not yet subject to call or redemption by the issuer. For example, advance refunding enables an issuer to refinance debt at
lower market interest rates, restructure debt to improve cash flow or eliminate restrictive covenants in the indenture or other governing instrument for the pre-refunded municipal securities. However, except for a change in the revenue source from
which principal and interest payments are made, the pre-refunded municipal securities remain outstanding on their original terms until they mature or are redeemed by the issuer.
The Fund may invest in private activity bonds. Private activity bonds are issued by or on behalf of public authorities to obtain funds to provide privately operated housing facilities, airport, mass transit or port
facilities, sewage disposal, solid waste disposal or hazardous waste treatment or disposal facilities and certain local facilities for water supply, gas or electricity. Other types of private activity bonds, the proceeds of which are used for the
71
Shareholder Update (Unaudited) (continued)
construction, equipment, repair or improvement of privately operated industrial or commercial facilities, may constitute municipal securities, although the current federal tax laws place substantial limitations on the
size of such issues.
The Fund may invest in inverse floating rate securities issued by a TOB trust, the interest rate on which varies inversely with the Securities Industry Financial Markets Association short-term rate, which resets
weekly, or a similar short-term rate, and is reduced by the expenses related to the TOB trust. Typically, inverse floating rate securities represent beneficial interests in a special purpose trust (sometimes called a TOB trust) formed by a third
party sponsor for the purpose of holding municipal bonds. Inverse floating rate securities may increase or decrease in value at a greater rate than the underlying interest rate on the municipal bond held by the TOB trust, which effectively
leverages the Fund’s investment.
The Fund may invest in floating rate securities issued by special purpose trusts. Floating rate securities may take the form of short-term floating rate securities or the option period may be substantially longer.
Generally, the interest rate earned will be based upon the market rates for municipal securities with maturities or remarketing provisions that are comparable in duration to the periodic interval of the tender option, which may vary from weekly, to
monthly, to extended periods of one year or multiple years. Since the option feature has a shorter term than the final maturity or first call date of the underlying bond deposited in the trust, the Fund as the holder of the floating rate security
relies upon the terms of the agreement with the financial institution furnishing the option as well as the credit strength of that institution. As further assurance of liquidity, the terms of the trust provide for a liquidation of the municipal
security deposited in the trust and the application of the proceeds to pay off the floating rate security. The trusts that are organized to issue both short-term floating rate securities and inverse floaters generally include liquidation triggers
to protect the investor in the floating rate security.
The Fund may invest in municipal securities issued by special taxing districts. Special taxing districts are organized to plan and finance infrastructure developments to induce residential, commercial and industrial
growth and redevelopment. The bond financing methods such as tax increment finance, tax assessment, special services district and Mello-Roos bonds, are generally payable solely from taxes or other revenues attributable to the specific projects
financed by the bonds without recourse to the credit or taxing power of related or overlapping municipalities.
The Fund may invest in zero coupon bonds. A zero coupon bond is a bond that typically does not pay interest for the entire life of the obligation or for an initial period after the issuance of the obligation.
The Fund may buy and sell securities on a when-issued or delayed delivery basis, making payment or taking delivery at a later date, normally within 15 to 45 days of the trade date.
The Fund may utilize structured notes and similar instruments for investment purposes and also for hedging purposes. Structured notes are privately negotiated debt obligations where the principal and/or interest is
determined by reference to the performance of a benchmark asset, market or interest rate (an “embedded index”), such as selected securities, an index of securities or specified interest rates, or the differential performance of two assets or
markets.
The Fund may invest in illiquid securities (i.e., securities that are not readily marketable), including, but not limited to, restricted securities (securities the disposition
of which is restricted under the federal securities laws), securities that may be resold only pursuant to Rule 144A under the 1933 Act, and repurchase agreements with maturities in excess of seven days.
The Fund may enter into certain derivative instruments in pursuit of its investment objectives, including to seek to enhance return, to hedge certain risks of its investments in municipal securities or as a substitute
for a position in the underlying asset. Such instruments include financial futures contracts, swap contracts (including interest rate swaps, credit default swaps and MMD Rate Locks), options on financial futures, options on swap contracts or other
derivative instruments.
The Fund may purchase and sell MMD Rate Locks. An MMD Rate Lock permits the Fund to lock in a specified municipal interest rate for a portion of its portfolio to preserve a return on a particular investment or a
portion of its portfolio as a duration management technique or to protect against any increase in the price of securities to be purchased at a later date. By using an MMD Rate Lock, the Fund can create a synthetic long or short position, allowing
the Fund to select what the manager believes is an attractive part of the yield curve. The Fund will ordinarily use these transactions as a hedge or for duration or risk management although it is permitted to enter into them to enhance income or
gain or to increase the Fund’s yield, for example, during periods of steep interest rate yield curves (i.e., wide differences between short term and long term interest rates).
The Fund may also invest in securities of other open- or closed-end investment companies (including ETFs) that invest primarily in municipal securities of the types in which the Fund may invest directly, to the extent
permitted by the 1940 Act, the rules and regulations issued thereunder and applicable exemptive orders issued by the SEC.
Use of Leverage
As a fundamental policy, the Fund will not leverage its capital structure by issuing senior securities such as Preferred Shares or debt instruments, except in connection with bank borrowing and derivatives
transactions (subject to certain investment restrictions). However, the Fund may borrow (including reverse repurchase agreements) for temporary, emergency or other purposes as permitted by the 1940 Act, and invest in certain instruments, including
72
inverse floating rate securities that have the economic effect of leverage. The Fund may source leverage through investments in inverse floating rate securities, which have the economic effect of leverage.
Temporary Defensive Periods
During temporary defensive periods (e.g., times when, in the Fund’s investment adviser’s and/or the Fund’s sub-adviser’s opinion, temporary imbalances of supply and demand or
other temporary dislocations in the tax-exempt bond market adversely affect the price at which long-term or intermediate-term municipal securities are available), the Fund may invest up to 100% of its net assets in cash or cash equivalents,
short-term investments or municipal bonds and deviate from its investment policies including the Fund’s 80% names rule policy. Also, during these periods, the Fund may not achieve its investment objectives.
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Shareholder Update (Unaudited) (continued)
NUVEEN NEW YORK QUALITY MUNICIPAL INCOME FUND (NAN)
Investment Objectives
The Fund’s investment objectives are to provide current income exempt from regular federal, New York State and New York City income tax and to enhance portfolio value relative to the municipal bond market by investing
in tax-exempt municipal bonds that the Fund’s investment adviser and/or the Fund’s sub-adviser believes are underrated or undervalued or that represent municipal market sectors that are undervalued.
Investment Policies
As a fundamental policy, under normal circumstances, the Fund will invest at least 80% of its Assets (as defined below) in municipal securities and other related investments the income from which is exempt from
regular federal, New York State and New York City income taxes.
The Fund primarily invests in municipal securities with long- or intermediate-term maturities in order to maintain a weighted average maturity of at least 15 to 30 years, but the average weighted maturity of
obligations held by the Fund may be shortened, depending on market conditions. As a result, the Fund’s portfolio may include long-term and intermediate-term municipal securities.
“Assets” mean the net assets of the Fund plus the amount of any borrowings for investment purposes. “Managed Assets” mean the total assets of the Fund, minus the sum of its accrued liabilities (other than Fund
liabilities incurred for the express purpose of creating leverage). Total assets for this purpose shall include assets attributable to the Fund’s use of leverage (whether or not those assets are reflected in the Fund’s financial statements for
purposes of generally accepted accounting principles), and derivatives will be valued at their market value.
Under normal circumstances:
• The Fund will invest at least 80% of its Managed Assets in investment grade securities that, at the time of investment, are rated within the four highest grades (Baa or BBB
or better) by at least one nationally recognized statistical rating organization (an “NRSRO”) or are unrated but judged to be of comparable quality by the Fund’s investment adviser and/or the Fund’s sub-adviser.
• The Fund may invest up to 20% of its Managed Assets in municipal securities that at the time of investment are rated below investment grade or are unrated but judged to be
of comparable quality by the Fund’s investment adviser and/or the Fund’s sub-adviser.
• No more than 10% of the Fund’s Managed Assets may be invested in municipal securities rated below B3/B- or that are unrated but judged to be of comparable quality by the
Fund’s investment adviser and/or the Fund’s sub-adviser.
• The Fund also may invest up to 15% of its Managed Assets in inverse floating rate securities
• The Fund may invest up to 10% of its Managed Assets in securities of other open- or closed-end investment companies (including exchange-traded funds (“ETFs”) that invest
primarily in municipal securities of the types in which the Fund may invest directly.
The foregoing policies apply only at the time of any new investment.
Approving Changes in Investment Policies
The Board of Trustees of the Fund may change the policies described above without a shareholder vote. However, the Fund’s investment objectives and its policy of investing at least 80% of its Assets in municipal
securities and other related investments the income from which is exempt from regular federal, New York State and New York City income taxes, may not be changed without the approval of the holders of a majority of the outstanding common shares and
preferred shares voting together as a single class, and the approval of the holders of a majority of the outstanding preferred shares, voting separately as a single class. A “majority of the outstanding” shares means (i) 67% or more of the shares
present at a meeting, if the holders of more than 50% of the shares are present or represented by proxy or (ii) more than 50% of the shares, whichever is less.
Portfolio Contents
The Fund invests in various municipal securities, including municipal bonds and notes, other securities issued to finance and refinance public projects, and other related securities and derivative instruments creating
exposure to municipal bonds, notes and securities that provide for the payment of interest income that is exempt from federal, New York State and New York City income tax.
Municipal securities include municipal bonds, notes, securities issued to finance and refinance public projects, certificates of participation, variable rate demand obligations, lease obligations, municipal notes,
pre-refunded municipal bonds, private activity bonds, securities issued by tender option bond trusts (“TOB trusts”), including inverse floating rate securities, and other forms of municipal bonds and securities, and other related instruments that
create exposure to municipal bonds, notes and securities that provide for the payment of interest income that is exempt from regular U.S. federal income tax and New York State and New York City personal income taxes.
Municipal securities are debt obligations generally issued by states, cities and local authorities and certain possessions and territories of the United States (such as Puerto Rico and Guam) to finance or refinance
public purpose projects such as roads, schools, and water supply systems.
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The municipal securities in which the Fund invests are generally issued by the State of New York, a municipality of New York, or a political subdivision of either, and pay interest that, in the opinion of bond counsel
to the issuer (or on the basis of other authority believed by Nuveen Asset Management to be reliable), is exempt from regular federal, New York State and New York City income taxes, although the interest may be subject to the federal alternative
minimum tax. The Fund may invest in municipal securities issued by U.S. territories (such as Puerto Rico or Guam) that are exempt from regular federal, New York State and New York City income taxes.
The Fund may also invest in municipal securities that pay interest that is taxable under the federal alternative minimum tax applicable to noncorporate taxpayers (“AMT Bonds”). AMT Bonds may trigger adverse tax
consequences for Fund shareholders who are subject to the federal alternative minimum tax.
The Fund may invest in municipal securities that represent lease obligations and certificates of participation in such leases. A municipal lease is an obligation in the form of a lease or installment purchase that is
issued by a state or local government to acquire equipment and facilities. Income from such obligations generally is exempt from state and local taxes in the state of issuance. A certificate of participation represents an undivided interest in an
unmanaged pool of municipal leases, an installment purchase agreement or other instruments. The certificates typically are issued by a municipal agency, a trust or other entity that has received an assignment of the payments to be made by the state
or political subdivision under such leases or installment purchase agreements. Such certificates provide the Fund with the right to a pro rata undivided interest in the underlying municipal securities. In
addition, such participations generally provide the Fund with the right to demand payment, on not more than seven days’ notice, of all or any part of the Fund’s participation interest in the underlying municipal securities, plus accrued interest.
The Fund may invest in municipal notes. Municipal securities in the form of notes generally are used to provide for short-term capital needs, in anticipation of an issuer’s receipt of other revenues or financing, and
typically have maturities of up to three years. Such instruments may include tax anticipation notes, revenue anticipation notes, bond anticipation notes, tax and revenue anticipation notes and construction loan notes. Tax anticipation notes are
issued to finance the working capital needs of governments. Generally, they are issued in anticipation of various tax revenues, such as income, sales, property, use and business taxes, and are payable from these specific future taxes. Revenue
anticipation notes are issued in expectation of receipt of other kinds of revenue, such as federal revenues available under federal revenue sharing programs. Bond anticipation notes are issued to provide interim financing until long-term bond
financing can be arranged. In most cases, the long-term bonds then provide the funds needed for repayment of the bond anticipation notes. Tax and revenue anticipation notes combine the funding sources of both tax anticipation notes and revenue
anticipation notes. Construction loan notes are sold to provide construction financing. Mortgage notes insured by the Federal Housing Authority secure these notes; however, the proceeds from the insurance may be less than the economic equivalent of
the payment of principal and interest on the mortgage note if there has been a default. The anticipated revenues from taxes, grants or bond financing generally secure the obligations of an issuer of municipal notes.
The Fund may invest in “tobacco settlement bonds.” Tobacco settlement bonds are municipal securities that are secured or payable solely from the collateralization of the proceeds from class action or other litigation
against the tobacco industry.
The Fund may invest in pre-refunded municipal securities. The principal of and interest on pre-refunded municipal securities are no longer paid from the original revenue source for the securities. Instead, the source
of such payments is typically an escrow fund consisting of U.S. government securities. The assets in the escrow fund are derived from the proceeds of refunding bonds issued by the same issuer as the pre-refunded municipal securities. Issuers of
municipal securities use this advance refunding technique to obtain more favorable terms with respect to securities that are not yet subject to call or redemption by the issuer. For example, advance refunding enables an issuer to refinance debt at
lower market interest rates, restructure debt to improve cash flow or eliminate restrictive covenants in the indenture or other governing instrument for the pre-refunded municipal securities. However, except for a change in the revenue source from
which principal and interest payments are made, the pre-refunded municipal securities remain outstanding on their original terms until they mature or are redeemed by the issuer.
The Fund may invest in private activity bonds. Private activity bonds are issued by or on behalf of public authorities to obtain funds to provide privately operated housing facilities, airport, mass transit or port
facilities, sewage disposal, solid waste disposal or hazardous waste treatment or disposal facilities and certain local facilities for water supply, gas or electricity. Other types of private activity bonds, the proceeds of which are used for the
construction, equipment, repair or improvement of privately operated industrial or commercial facilities, may constitute municipal securities, although the current federal tax laws place substantial limitations on the size of such issues.
The Fund may invest in inverse floating rate securities issued by a TOB trust, the interest rate on which varies inversely with the Securities Industry Financial Markets Association short-term rate, which resets
weekly, or a similar short-term rate, and is reduced by the expenses related to the TOB trust. Typically, inverse floating rate securities represent beneficial interests in a special purpose trust (sometimes called a TOB trust) formed by a third
party sponsor for the purpose of holding municipal bonds. Inverse floating rate securities may increase or decrease in value at a greater rate than the underlying interest rate on the municipal bond held by the TOB trust, which effectively
leverages the Fund’s investment.
The Fund may invest in floating rate securities issued by special purpose trusts. Floating rate securities may take the form of short-term floating rate securities or the option period may be substantially longer.
Generally, the interest rate earned will be based upon the market rates for municipal securities with maturities or remarketing provisions that are comparable in duration to the periodic interval of the tender option, which may vary from
75
Shareholder Update (Unaudited) (continued)
weekly, to monthly, to extended periods of one year or multiple years. Since the option feature has a shorter term than the final maturity or first call date of the underlying bond deposited in the trust, the Fund as
the holder of the floating rate security relies upon the terms of the agreement with the financial institution furnishing the option as well as the credit strength of that institution. As further assurance of liquidity, the terms of the trust
provide for a liquidation of the municipal security deposited in the trust and the application of the proceeds to pay off the floating rate security. The trusts that are organized to issue both short-term floating rate securities and inverse
floaters generally include liquidation triggers to protect the investor in the floating rate security.
The Fund may invest in municipal securities issued by special taxing districts. Special taxing districts are organized to plan and finance infrastructure developments to induce residential, commercial and industrial
growth and redevelopment. The bond financing methods such as tax increment finance, tax assessment, special services district and Mello-Roos bonds, are generally payable solely from taxes or other revenues attributable to the specific projects
financed by the bonds without recourse to the credit or taxing power of related or overlapping municipalities.
The Fund may invest in zero coupon bonds. A zero coupon bond is a bond that typically does not pay interest for the entire life of the obligation or for an initial period after the issuance of the obligation.
The Fund may buy and sell securities on a when-issued or delayed delivery basis, making payment or taking delivery at a later date, normally within 15 to 45 days of the trade date.
The Fund may utilize structured notes and similar instruments for investment purposes and also for hedging purposes. Structured notes are privately negotiated debt obligations where the principal and/or interest is
determined by reference to the performance of a benchmark asset, market or interest rate (an “embedded index”), such as selected securities, an index of securities or specified interest rates, or the differential performance of two assets or
markets.
The Fund may invest in illiquid securities (i.e., securities that are not readily marketable), including, but not limited to, restricted securities (securities the disposition
of which is restricted under the federal securities laws), securities that may be resold only pursuant to Rule 144A under the Securities Act of 1933, as amended (the “1933 Act”), and repurchase agreements with maturities in excess of seven days.
The Fund may enter into certain derivative instruments in pursuit of its investment objectives, including to seek to enhance return, to hedge certain risks of its investments in fixed-income securities or as a
substitute for a position in the underlying asset. Such instruments include financial futures contracts, swap contracts (including interest rate swaps, credit default swaps and municipal market data rate locks (“MMD Rate Locks”)), options on
financial futures, options on swap contracts or other derivative instruments.
The Fund may purchase and sell MMD Rate Locks. An MMD Rate Lock permits the Fund to lock in a specified municipal interest rate for a portion of its portfolio to preserve a return on a particular investment or a
portion of its portfolio as a duration management technique or to protect against any increase in the price of securities to be purchased at a later date. By using an MMD Rate Lock, the Fund can create a synthetic long or short position, allowing
the Fund to select what the manager believes is an attractive part of the yield curve. The Fund will ordinarily use these transactions as a hedge or for duration or risk management although it is permitted to enter into them to enhance income or
gain or to increase the Fund’s yield, for example, during periods of steep interest rate yield curves (i.e., wide differences between short term and long term interest rates).
The Fund may also invest in securities of other open- or closed-end investment companies (including ETFs) that invest primarily in municipal securities of the types in which the Fund may invest directly, to the extent
permitted by the Investment Company Act of 1940, as amended (the “1940 Act”), the rules and regulations issued thereunder and applicable exemptive orders issued by the Securities and Exchange Commission (“SEC”).
Use of Leverage
The Fund uses leverage to pursue its investment objectives. The Fund may use leverage to the extent permitted by the 1940 Act. The Fund may source leverage through a number of methods including the issuance of
preferred shares of beneficial interest (“Preferred Shares”) and investments in inverse floating rate securities. The Fund may borrow money (including reverse repurchase agreements) from banks for temporary or emergency purposes, or to repurchase
its shares. In addition, the Fund may also use certain derivatives that have the economic effect of leverage by creating additional investment exposure. The amount and sources of leverage will vary depending on market conditions.
Temporary Defensive Periods
During temporary defensive periods (e.g., times when, in the Fund’s investment adviser’s and/or the Fund’s sub-adviser’s opinion, temporary imbalances of supply and demand or
other temporary dislocations in the tax-exempt bond market adversely affect the price at which municipal obligations are available), the Fund may invest up to 100% of its net assets in cash or cash equivalents, short-term investments or municipal
bonds and deviate from its investment policies including the Fund’s 80% names rule policy. Also, during these periods, the weighted average maturity of the Fund’s investment portfolio may fall below the effective maturity range of at least 15 to 30
years and the Fund may not achieve its investment objectives.
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NUVEEN NEW YORK AMT-FREE QUALITY MUNICIPAL INCOME FUND (NRK)
Investment Objectives
The Fund’s investment objectives are to provide current income exempt from regular federal, New York State and New York City income taxes and from the federal alternative minimum tax applicable to individuals and to
enhance portfolio value relative to the municipal bond market by investing in tax-exempt municipal bonds that the Fund’s investment adviser believes are underrated or undervalued or that represent municipal market sectors that are undervalued.
Investment Policies
As a fundamental policy, under normal circumstances, the Fund will invest at least 80% of its Assets (as defined below) in municipal securities and other related investments the income from which is exempt from
regular federal and New York State and New York City income taxes and from the federal alternative minimum tax applicable to individuals.
As a non-fundamental policy, under normal circumstances, the Fund will invest 100% of its Managed Assets (as defined below) in municipal securities and other related investments the income from which is exempt from
the federal alternative minimum tax applicable to individuals at the time of purchase.
The Fund will invest primarily in municipal securities with long-term maturities in order to maintain an average effective maturity of 15 to 30 years, including the effects of leverage, but the average effective
maturity of obligations held by the Fund may be lengthened or shortened as a result of portfolio transactions effected by the Fund’s investment adviser and/or the Fund’s sub-adviser, depending on market conditions and on an assessment by the
portfolio manager of which segments of the municipal securities markets offer the most favorable relative investment values and opportunities for tax-exempt income and total return. As a result, the Fund’s portfolio at any given time may include
both long-term and intermediate-term municipal securities.
“Assets” mean the net assets of the Fund plus the amount of any borrowings for investment purposes. “Managed Assets” mean the total assets of the Fund, minus the sum of its accrued liabilities (other than Fund
liabilities incurred for the express purpose of creating leverage). Total assets for this purpose shall include assets attributable to the Fund’s use of leverage (whether or not those assets are reflected in the Fund’s financial statements for
purposes of generally accepted accounting principles), and derivatives will be valued at their market value.
Under normal circumstances:
• The Fund will invest at least 80% of its Managed Assets in investment grade municipal securities that, at the time of investment, are rated within the four highest grades
(Baa or BBB or better) by at least one NRSRO or are unrated but judged to be of comparable quality by the Fund’s sub-adviser.
• The Fund may invest up to 20% of its Managed Assets in municipal securities that at the time of investment are rated below investment grade (Ba or BB or lower) or are
unrated but judged to be of comparable quality by the Fund’s investment adviser and/or the Fund’s sub-adviser.
• No more than 10% of the Fund’s Managed Assets may be invested in municipal securities rated below B3/B- or that are unrated but judged to be of comparable quality by the
Fund’s investment adviser and/or the Fund’s sub-adviser.
• The Fund may invest in distressed securities but may not invest in the securities of an issuer which, at the time of investment, is in default on its obligations to pay
principal or interest thereon when due or that is involved in a bankruptcy proceeding (i.e., rated below C-, at the time of investment); provided, however, that the Fund’s sub-adviser may determine that it
is in the best interest of shareholders in pursuing a workout arrangement with issuers of defaulted securities to make loans to the defaulted issuer or another party, or purchase a debt, equity or other interest from the defaulted issuer or another
party, or take other related or similar steps involving the investment of additional monies, but only if that issuer’s securities are already held by the Fund.
• The Fund may invest up to 10% of its Managed Assets in securities of other open- or closed-end investment companies (including ETFs) that invest primarily in municipal
securities of the types in which the Fund may invest directly.
• The Fund may invest up to 15% of its Managed Assets in inverse floating rate securities.
The foregoing policies apply only at the time of any new investment.
Approving Changes in Investment Policies
The Board of Trustees of the Fund may change the policies described above without a shareholder vote. However, the Fund’s policy of investing at least 80% of its Assets in municipal securities and other related
investments the income from which is exempt from regular federal and New York State and New York City income taxes and from the federal alternative minimum tax applicable to individuals, may not be changed without the approval of the holders of a
majority of the outstanding common shares and preferred shares voting together as a single class, and the approval of the holders of a majority of the outstanding preferred shares, voting separately as a single class. A “majority of the
outstanding” shares means (i) 67% or more of the
77
Shareholder Update (Unaudited) (continued)
shares present at a meeting, if the holders of more than 50% of the shares are present or represented by proxy or (ii) more than 50% of the shares, whichever is less.
Portfolio Contents
The Fund invests in various municipal securities, including municipal bonds and notes, other securities issued to finance and refinance public projects, and other related securities and derivative instruments creating
exposure to municipal bonds, notes and securities that provide for the payment of interest income that is exempt from federal, New York State and New York City income tax.
Municipal securities include municipal bonds, notes, securities issued to finance and refinance public projects, certificates of participation, variable rate demand obligations, lease obligations, municipal notes,
pre-refunded municipal bonds, private activity bonds, securities issued by TOB trusts, including inverse floating rate securities, and other forms of municipal bonds and securities, and other related instruments that create exposure to municipal
bonds, notes and securities that provide for the payment of interest income that is exempt from U.S. federal income tax and New York State and New York City income taxes.
Municipal securities are debt obligations generally issued by states, cities and local authorities and certain possessions and territories of the United States (such as Puerto Rico and Guam) to finance or refinance
public purpose projects such as roads, schools, and water supply systems.
The municipal securities in which the Fund invests are generally issued by the State of New York, a municipality in New York, or a political subdivision or agency or instrumentality of such State or municipality, and
pay interest that, in the opinion of bond counsel to the issuer (or on the basis of other authority believed by the Investment Adviser to be reliable), is exempt from regular federal, New York State and New York City personal income taxes and the
federal alternative minimum tax. The Fund may invest in municipal bonds issued by United States territories and possessions (such as Puerto Rico or Guam) that are exempt from regular federal, New York State and New York City personal income taxes
and the federal alternative minimum tax.
The Fund may invest in “tobacco settlement bonds.” Tobacco settlement bonds are municipal securities that are secured or payable solely from the collateralization of the proceeds from class action or other litigation
against the tobacco industry.
The Fund may invest in municipal securities that represent lease obligations and certificates of participation in such leases. A municipal lease is an obligation in the form of a lease or installment purchase that is
issued by a state or local government to acquire equipment and facilities. Income from such obligations generally is exempt from state and local taxes in the state of issuance. A certificate of participation represents an undivided interest in an
unmanaged pool of municipal leases, an installment purchase agreement or other instruments. The certificates typically are issued by a municipal agency, a trust or other entity that has received an assignment of the payments to be made by the state
or political subdivision under such leases or installment purchase agreements. Such certificates provide the Fund with the right to a pro rata undivided interest in the underlying municipal securities. In
addition, such participations generally provide the Fund with the right to demand payment, on not more than seven days’ notice, of all or any part of the Fund’s participation interest in the underlying municipal securities, plus accrued interest.
The Fund may invest in municipal notes. Municipal securities in the form of notes generally are used to provide for short-term capital needs, in anticipation of an issuer’s receipt of other revenues or financing, and
typically have maturities of up to three years. Such instruments may include tax anticipation notes, revenue anticipation notes, bond anticipation notes, tax and revenue anticipation notes and construction loan notes. Tax anticipation notes are
issued to finance the working capital needs of governments. Generally, they are issued in anticipation of various tax revenues, such as income, sales, property, use and business taxes, and are payable from these specific future taxes. Revenue
anticipation notes are issued in expectation of receipt of other kinds of revenue, such as federal revenues available under federal revenue sharing programs. Bond anticipation notes are issued to provide interim financing until long-term bond
financing can be arranged. In most cases, the long-term bonds then provide the funds needed for repayment of the bond anticipation notes. Tax and revenue anticipation notes combine the funding sources of both tax anticipation notes and revenue
anticipation notes. Construction loan notes are sold to provide construction financing. Mortgage notes insured by the Federal Housing Authority secure these notes; however, the proceeds from the insurance may be less than the economic equivalent of
the payment of principal and interest on the mortgage note if there has been a default. The anticipated revenues from taxes, grants or bond financing generally secure the obligations of an issuer of municipal notes.
The Fund may invest in pre-refunded municipal securities. The principal of and interest on pre-refunded municipal securities are no longer paid from the original revenue source for the securities. Instead, the source
of such payments is typically an escrow fund consisting of U.S. government securities. The assets in the escrow fund are derived from the proceeds of refunding bonds issued by the same issuer as the pre-refunded municipal securities. Issuers of
municipal securities use this advance refunding technique to obtain more favorable terms with respect to securities that are not yet subject to call or redemption by the issuer. For example, advance refunding enables an issuer to refinance debt at
lower market interest rates, restructure debt to improve cash flow or eliminate restrictive covenants in the indenture or other governing instrument for the pre-refunded municipal securities. However, except for a change in the revenue source from
which principal and interest payments are made, the pre-refunded municipal securities remain outstanding on their original terms until they mature or are redeemed by the issuer.
The Fund may invest in private activity bonds. Private activity bonds, formerly referred to as industrial development bonds, are issued by or on behalf of public authorities to obtain funds to provide privately
operated housing facilities, airport, mass transit or port facilities, sewage disposal, solid waste
78
disposal or hazardous waste treatment or disposal facilities and certain local facilities for water supply, gas or electricity. Other types of private activity bonds, the proceeds of which are used for the
construction, equipment, repair or improvement of privately operated industrial or commercial facilities, may constitute municipal securities, although the current federal tax laws place substantial limitations on the size of such issues. The
Fund’s distributions of its interest income from private activity bonds may subject certain investors to the federal alternative minimum tax applicable to individuals. However, the Fund will only invest in private activity bonds that are not
subject to the federal alternative minimum tax.
The Fund may invest in inverse floating rate securities issued by a TOB trust, the interest rate on which varies inversely with the Securities Industry Financial Markets Association short-term rate, which resets
weekly, or a similar short-term rate, and is reduced by the expenses related to the TOB trust. Typically, inverse floating rate securities represent beneficial interests in a special purpose trust (sometimes called a TOB trust) formed by a third
party sponsor for the purpose of holding municipal bonds. Inverse floating rate securities may increase or decrease in value at a greater rate than the underlying interest rate on the municipal bond held by the TOB trust, which effectively
leverages the Fund’s investment.
The Fund may invest in floating rate securities issued by special purpose trusts. Floating rate securities may take the form of short-term floating rate securities or the option period may be substantially longer.
Generally, the interest rate earned will be based upon the market rates for municipal securities with maturities or remarketing provisions that are comparable in duration to the periodic interval of the tender option, which may vary from weekly, to
monthly, to extended periods of one year or multiple years. Since the option feature has a shorter term than the final maturity or first call date of the underlying bond deposited in the trust, the Fund as the holder of the floating rate security
relies upon the terms of the agreement with the financial institution furnishing the option as well as the credit strength of that institution. As further assurance of liquidity, the terms of the trust provide for a liquidation of the municipal
security deposited in the trust and the application of the proceeds to pay off the floating rate security. The trusts that are organized to issue both short-term floating rate securities and inverse floaters generally include liquidation triggers
to protect the investor in the floating rate security.
The Fund may invest in municipal securities issued by special taxing districts. Special taxing districts are organized to plan and finance infrastructure developments to induce residential, commercial and industrial
growth and redevelopment. The bond financing methods such as tax increment finance, tax assessment, special services district and Mello-Roos bonds, are generally payable solely from taxes or other revenues attributable to the specific projects
financed by the bonds without recourse to the credit or taxing power of related or overlapping municipalities.
The Fund may invest in zero coupon bonds. A zero coupon bond is a bond that typically does not pay interest for the entire life of the obligation or for an initial period after the issuance of the obligation.
The Fund may utilize structured notes and similar instruments for investment purposes and also for hedging purposes. Structured notes are privately negotiated debt obligations where the principal and/or interest is
determined by reference to the performance of a benchmark asset, market or interest rate (an “embedded index”), such as selected securities, an index of securities or specified interest rates, or the differential performance of two assets or
markets.
The Fund may invest in illiquid securities (i.e., securities that are not readily marketable), including, but not limited to, restricted securities (securities the disposition
of which is restricted under the federal securities laws), securities that may be resold only pursuant to Rule 144A under the 1933 Act, and repurchase agreements with maturities in excess of seven days.
The Fund may enter into certain derivative instruments in pursuit of its investment objectives, including to seek to enhance return, to hedge certain risks of its investments in municipal securities or as a substitute
for a position in the underlying asset. Such instruments include financial futures contracts, swap contracts (including interest rate swaps, credit default swaps and MMD Rate Locks), options on financial futures, options on swap contracts or other
derivative instruments.
The Fund may purchase and sell MMD Rate Locks. An MMD Rate Lock permits the Fund to lock in a specified municipal interest rate for a portion of its portfolio to preserve a return on a particular investment or a
portion of its portfolio as a duration management technique or to protect against any increase in the price of securities to be purchased at a later date. By using an MMD Rate Lock, the Fund can create a synthetic long or short position, allowing
the Fund to select what the manager believes is an attractive part of the yield curve. The Fund will ordinarily use these transactions as a hedge or for duration or risk management although it is permitted to enter into them to enhance income or
gain or to increase the Fund’s yield, for example, during periods of steep interest rate yield curves (i.e., wide differences between short term and long term interest rates).
The Fund may also invest in securities of other open- or closed-end investment companies (including ETFs) that invest primarily in municipal securities of the types in which the Fund may invest directly, to the extent
permitted by the 1940 Act, the rules and regulations issued thereunder and applicable exemptive orders issued by the SEC. In addition, the Fund may invest a portion of its Managed Assets in pooled investment vehicles (other than investment
companies) that invest primarily in municipal securities of the types in which the Fund may invest directly.
Use of Leverage
The Fund uses leverage to pursue its investment objectives. The Fund may use leverage to the extent permitted by the 1940 Act. The Fund may source leverage through a number of methods including the issuance of
Preferred Shares and investments in inverse floating rate securities. The Fund may borrow (including reverse repurchase agreements) from banks for temporary or emergency purposes, or to repurchase its shares. In addition, the Fund
79
Shareholder Update (Unaudited) (continued)
may also use certain derivatives that have the economic effect of leverage by creating additional investment exposure. The amount and sources of leverage will vary depending on market conditions.
Temporary Defensive Periods
During temporary defensive periods (e.g., times when, in the Fund’s investment adviser’s and/or the Fund’s sub-adviser’s opinion, temporary imbalances of supply and demand or
other temporary dislocations in the tax-exempt bond market adversely affect the price at which long-term or intermediate-term municipal securities are available), the Fund may invest up to 100% of its net assets in cash or cash equivalents,
short-term investments or municipal bonds and deviate from its investment policies including the Fund’s 80% names rule policy. Also, during these periods, the weighted average maturity of the Fund’s investment portfolio may fall below the effective
maturity range of 15 to 30 years and the Fund may not achieve its investment objectives.
80
|
|
|
|
|
|
|
Nuveen
|
|
|
Nuveen
|
New York
|
|
Nuveen
|
New York
|
AMT-Free
|
|
New York
|
Quality
|
Quality
|
|
Municipal
|
Municipal
|
Municipal
|
|
Value
|
Income
|
Income
|
|
Fund
|
Fund
|
Fund
|
Risk
|
(NNY)
|
(NAN)
|
(NRK)
|
Fund Level and Other Risks
|
|
|
|
Anti-Takeover Provisions
|
X
|
X
|
X
|
Counterparty Risk
|
X
|
X
|
X
|
Cybersecurity Risk
|
X
|
X
|
X
|
Economic and Political Events Risk
|
X
|
X
|
X
|
Global Economic Risk
|
X
|
X
|
X
|
Investment and Market Risk
|
X
|
X
|
X
|
Legislation and Regulatory Risk
|
X
|
X
|
X
|
Leverage Risk
|
—
|
X
|
X
|
Market Discount from Net Asset Value
|
X
|
X
|
X
|
Recent Market Conditions
|
X
|
X
|
X
|
Reverse Repurchase Agreement Risk
|
X
|
X
|
X
|
|
Portfolio Level Risks:
|
|
|
|
Alternative Minimum Tax Risk. The Fund may invest in AMT Bonds. Therefore, a portion of the Fund’s otherwise
exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
Below Investment Grade Risk. Municipal securities of below investment grade quality are regarded as having
speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal, and may be subject to higher price volatility and default risk than investment grade municipal securities of comparable terms and duration.
Issuers of lower grade municipal securities may be highly leveraged and may not have available to them more traditional methods of financing. The prices of these lower grade securities are typically more sensitive to negative developments, such
as a decline in the issuer’s revenues or a general economic downturn. The secondary market for lower rated municipal securities may not be as liquid as the secondary market for more highly rated municipal securities, a factor which may have an
adverse effect on the Fund’s ability to dispose of a particular municipal security. If a below investment grade municipal security goes into default, or its issuer enters bankruptcy, it might be difficult to sell that security in a timely manner
at a reasonable price.
Call Risk. The Fund may invest in municipal securities that are subject to call risk. Such municipal securities
may be redeemed at the option of the issuer, or “called,” before their stated maturity or redemption date. In general, an issuer will call its instruments if they can be refinanced by issuing new instruments that bear a lower interest rate. The
Fund is subject to the possibility that during periods of falling interest rates, an issuer will call its high yielding municipal securities. The Fund would then be forced to invest the unanticipated proceeds at lower interest rates, resulting in
a decline in the Fund’s income.
Credit Risk. Issuers of municipal securities in which the Fund may invest may default on their obligations to
pay principal or interest when due. This non-payment would result in a reduction of income to the Fund, a reduction in the value of a municipal security experiencing non-payment and potentially a decrease in the net asset value (“NAV”) of the
Fund. To the extent that the credit rating assigned to a municipal security in the Fund’s portfolio is downgraded, the market price and liquidity of such security may be adversely affected.
Credit Spread Risk. Credit spread risk is the risk that credit spreads (i.e., the difference in yield between
securities that is due to differences in their credit quality) may increase when the market believes that municipal securities generally have a greater risk of default. Increasing credit spreads may reduce the market values of the Fund’s
securities. Credit spreads often increase more for lower rated and unrated securities than for investment grade securities. In addition, when credit spreads increase, reductions in market value will generally be greater for longer-maturity
securities.
Deflation Risk. Deflation risk is the risk that prices throughout the economy decline over time. Deflation may
have an adverse effect on the creditworthiness of issuers and may make issuer default more likely, which may result in a decline in the value of the Fund’s portfolio.
Derivatives Risk. The use of derivatives involves additional risks and transaction costs which could leave the
Fund in a worse position than if it had not used these instruments. Derivative instruments can be used to acquire or to transfer the risk and returns of a municipal security or other asset without buying or selling the municipal security or
asset. These instruments may entail investment exposures that are greater than their cost would suggest. As a result, a small investment in derivatives can result in losses that greatly exceed the original investment. Derivatives can be highly
volatile, illiquid and
82
difficult to value. An over-the-counter derivative transaction between the Fund and a counterparty that is not cleared through a central counterparty also involves the risk that a loss may be sustained as a result of
the failure of the counterparty to the contract to make required payments. The payment obligation for a cleared derivative transaction is guaranteed by a central counterparty, which exposes the Fund to the creditworthiness of the central
counterparty.
It is possible that developments in the derivatives market, including changes in government regulation, could adversely impact the Fund’s ability to invest in certain derivatives.
Distressed Securities Risk. The Fund may invest in low-rated securities or securities unrated but judged by the
sub-adviser to be of comparable quality. Some or many of these low-rated securities, although not in default, may be “distressed,” meaning that the issuer is experiencing financial difficulties or distress at the time of acquisition. Such
securities would present a substantial risk of future default which may cause the Fund to incur losses, including additional expenses, to the extent it is required to seek recovery upon a default in the payment of principal or interest on those
securities. In any reorganization or liquidation proceeding relating to a portfolio security, the Fund may lose its entire investment or may be required to accept cash or securities with a value less than its original investment. Distressed
securities may be subject to restrictions on resale.
Duration Risk. Duration is the sensitivity, expressed in years, of the price of a fixed-income security to
changes in the general level of interest rates (or yields). Securities with longer durations tend to be more sensitive to interest rate (or yield) changes, which typically corresponds to increased volatility and risk, than securities with shorter
durations. For example, if a security or portfolio has a duration of three years and interest rates increase by 1%, then the security or portfolio would decline in value by approximately 3%. Duration differs from maturity in that it considers
potential changes to interest rates, and a security’s coupon payments, yield, price and par value and call features, in addition to the amount of time until the security matures. The duration of a security will be expected to change over time
with changes in market factors and time to maturity.
Economic Sector Risk. The Fund may invest a significant amount of its total assets in municipal securities in
the same economic sector. This may make the Fund more susceptible to adverse economic, political or regulatory occurrences affecting an economic sector. As concentration increases, so does the potential for fluctuation in the value of the Fund’s
assets. In addition, the Fund may invest a significant portion of its assets in certain sectors of the municipal securities market, such as health care facilities, private educational facilities, special taxing districts and start-up utility
districts, and private activity bonds including industrial development bonds on behalf of transportation companies, whose credit quality and performance may be more susceptible to economic, business, political, regulatory and other developments
than other sectors of municipal issuers. If the Fund invests a significant portion of its assets in the sectors noted above, the Fund’s performance may be subject to additional risk and variability.
Financial Futures and Options Transactions Risk. The Fund may use certain transactions for hedging the
portfolio’s exposure to credit risk and the risk of increases in interest rates, which could result in poorer overall performance for the Fund. There may be an imperfect correlation between price movements of the futures and options and price
movements of the portfolio securities being hedged.
If the Fund engages in futures transactions or in the writing of options on futures, it will be required to maintain initial margin and maintenance margin and may be required to make daily variation margin payments in
accordance with applicable rules of the exchanges and the Commodity Futures Trading Commission (“CFTC”). If the Fund purchases a financial futures contract or a call option or writes a put option in order to hedge the anticipated purchase of
municipal securities, and if the Fund fails to complete the anticipated purchase transaction, the Fund may have a loss or a gain on the futures or options transaction that will not be offset by price movements in the municipal securities that were
the subject of the anticipatory hedge. There can be no assurance that a liquid market will exist at a time when the Fund seeks to close out a derivatives or futures or a futures option position, and the Fund would remain obligated to meet margin
requirements until the position is closed.
Hedging Risk. The Fund’s use of derivatives or other transactions to reduce risk involves costs and will be
subject to the investment adviser’s and/or the sub-adviser’s ability to predict correctly changes in the relationships of such hedge instruments to the Fund’s portfolio holdings or other factors. No assurance can be given that the investment
adviser’s and/or the sub-adviser’s judgment in this respect will be correct, and no assurance can be given that the Fund will enter into hedging or other transactions at times or under circumstances in which it may be advisable to do so. Hedging
activities may reduce the Fund’s opportunities for gain by offsetting the positive effects of favorable price movements and may result in net losses.
Illiquid Investments Risk. Illiquid investments are investments that are not readily marketable and may include
restricted securities, which are securities that may not be resold unless they have been registered under the 1933 Act or that can be sold in a private transaction pursuant to an available exemption from such registration. Illiquid investments
involve the risk that the investments will not be able to be sold at the time desired by the Fund or at prices approximating the value at which the Fund is carrying the investments on its books from time to time.
Income Risk. The Fund’s income could decline due to falling market interest rates. This is because, in a falling
interest rate environment, the Fund generally will have to invest the proceeds from maturing portfolio securities in lower-yielding securities.
Inflation Risk. Inflation risk is the risk that the value of assets or income from investments will be worth
less in the future as inflation decreases the value of money. As inflation increases, the real value of the common shares and distributions can decline.
Insurance Risk. The Fund may purchase municipal securities that are secured by insurance, bank credit agreements
or escrow accounts. The credit quality of the companies that provide such credit enhancements will affect the value of those securities. Certain significant providers of insurance for
83
Shareholder Update (Unaudited) (continued)
municipal securities have incurred significant losses as a result of exposure to sub-prime mortgages and other lower credit quality investments. As a result, such losses reduced the insurers’ capital and called into
question their continued ability to perform their obligations under such insurance if they are called upon to do so in the future. While an insured municipal security will typically be deemed to have the rating of its insurer, if the insurer of a
municipal security suffers a downgrade in its credit rating or the market discounts the value of the insurance provided by the insurer, the value of the municipal security would more closely, if not entirely, reflect such rating. In such a case,
the value of insurance associated with a municipal security may not add any value. The insurance feature of a municipal security does not guarantee the full payment of principal and interest through the life of an insured obligation, the market
value of the insured obligation or the NAV of the common shares represented by such insured obligation.
Interest Rate Risk. Interest rate risk is the risk that municipal securities in the Fund’s portfolio will
decline in value because of changes in market interest rates. Generally, when market interest rates rise, the market value of such securities will fall, and vice versa. As interest rates decline, issuers of municipal securities may prepay
principal earlier than scheduled, forcing the Fund to reinvest in lower-yielding securities and potentially reducing the Fund’s income. As interest rates increase, slower than expected principal payments may extend the average life of municipal
securities, potentially locking in a below-market interest rate and reducing the Fund’s value. In typical market interest rate environments, the prices of longer-term municipal securities generally fluctuate more than prices of shorter-term
municipal securities as interest rates change.
Inverse Floating Rate Securities Risk. The Fund may invest in inverse floating rate securities. In general,
income on inverse floating rate securities will decrease when short-term interest rates increase and increase when short-term interest rates decrease. Investments in inverse floating rate securities may subject the Fund to the risks of reduced or
eliminated interest payments and losses of principal. In addition, inverse floating rate securities may increase or decrease in value at a greater rate than the underlying interest rate, which effectively leverages the Fund’s investment. As a
result, the market value of such securities generally will be more volatile than that of fixed rate securities.
The Fund may invest in inverse floating rate securities issued by special purpose trusts that have recourse to the Fund. In such instances, the Fund may be at risk of loss that exceeds its investment in the inverse
floating rate securities.
The Fund may be required to sell its inverse floating rate securities at less than favorable prices, or liquidate other Fund portfolio holdings in certain circumstances, including, but not limited to, the following:
• If the Fund has a need for cash and the securities in a special purpose trust are not actively trading due to adverse market conditions;
• If special purpose trust sponsors (as a collective group or individually) experience financial hardship and consequently seek to terminate their respective outstanding
special purpose trusts; and
• If the value of an underlying security declines significantly and if additional collateral has not been posted by the Fund.
Municipal Securities Market Liquidity Risk. Inventories of municipal securities held by brokers and dealers have
decreased in recent years, lessening their ability to make a market in these securities. This reduction in market making capacity has the potential to decrease the Fund’s ability to buy or sell municipal securities at attractive prices, and
increase municipal security price volatility and trading costs, particularly during periods of economic or market stress. In addition, recent federal banking regulations may cause certain dealers to reduce their inventories of municipal
securities, which may further decrease the Fund’s ability to buy or sell municipal securities. As a result, the Fund may be forced to accept a lower price to sell a security, to sell other securities to raise cash, or to give up an investment
opportunity, any of which could have a negative effect on performance. If the Fund needed to sell large blocks of municipal securities to raise cash to meet its obligations, those sales could further reduce the municipal securities’ prices and
hurt performance.
Municipal Securities Market Risk. The amount of public information available about the municipal securities in
the Fund’s portfolio is generally less than that for corporate equities or bonds, and the investment performance of the Fund may therefore be more dependent on the analytical abilities of the sub-adviser than if the Fund were a stock fund or
taxable bond fund. The secondary market for municipal securities, particularly below investment grade municipal securities, also tends to be less well-developed or liquid than many other securities markets, which may adversely affect the Fund’s
ability to sell its municipal securities at attractive prices.
Other Investment Companies Risk. The Fund may invest in the securities of other investment companies, including
ETFs. Investing in an investment company exposes the Fund to all of the risks of that investment company’s investments. The Fund, as a holder of the securities of other investment companies, will bear its pro rata portion of the other investment
companies’ expenses, including advisory fees. These expenses are in addition to the direct expenses of the Fund’s own operations. As a result, the cost of investing in investment company shares may exceed the costs of investing directly in its
underlying investments. In addition, securities of other investment companies may be leveraged. As a result, the Fund may be indirectly exposed to leverage through an investment in such securities and therefore magnify the Fund’s leverage risk.
With respect to ETF’s, an ETF that is based on a specific index may not be able to replicate and maintain exactly the composition and relative weighting of securities in the index. The value of an ETF based on a
specific index is subject to change as the values of its respective component assets fluctuate according to market volatility. ETFs typically rely on a limited pool of authorized participants to create and redeem shares, and an active trading
market for ETF shares may not develop or be maintained. The market value of shares of ETFs and closed-end funds may differ from their NAV.
84
Puerto Rico Municipal Securities Market Risk. To the extent that the Fund invests a significant portion of its
assets in the securities issued by the Commonwealth of Puerto Rico or its political subdivisions, agencies, instrumentalities, or public corporations (collectively referred to as “Puerto Rico” or the “Commonwealth”), it will be disproportionally
affected by political, social and economic conditions and developments in the Commonwealth. In addition, economic, political or regulatory changes in that territory could adversely affect the value of the Fund’s investment portfolio.
Puerto Rico currently is experiencing significant fiscal and economic challenges, including substantial debt service obligations, high levels of unemployment, underfunded public retirement systems, and persistent
government budget deficits. These challenges may negatively affect the value of the Fund’s investments in Puerto Rican municipal securities. Several major ratings agencies have downgraded the general obligation debt of Puerto Rico to below
investment grade and continue to maintain a negative outlook for this debt, which increases the likelihood that the rating will be lowered further. Puerto Rico recently defaulted on its debt by failing to make full payment due on its outstanding
bonds, and there can be no assurance that Puerto Rico will be able to satisfy its future debt obligations. Further downgrades or defaults may place additional strain on the Puerto Rico economy and may negatively affect the value, liquidity, and
volatility of the Fund’s investments in Puerto Rican municipal securities. Additionally, numerous issuers have entered Title III of the Puerto Rico Oversight, Management and Economic Stability Act (“PROMESA”), which is similar to bankruptcy
protection, through which the Commonwealth of Puerto Rico can restructure its debt. However, Puerto Rico’s case is the first ever heard under PROMESA and there is no existing case precedent to guide the proceedings. Accordingly, Puerto Rico’s debt
restructuring process could take significantly longer than traditional municipal bankruptcy proceedings. Further, it is not clear whether a debt restructuring process will ultimately be approved or, if so, the extent to which it will apply to
Puerto Rico municipal securities sold by an issuer other than the territory. A debt restructuring could reduce the principal amount due, the interest rate, the maturity, and other terms of Puerto Rico municipal securities, which could adversely
affect the value of Puerto Rican municipal securities. Legislation that would allow Puerto Rico to restructure its municipal debt obligations, thus increasing the risk that Puerto Rico may never pay off municipal indebtedness, or may pay only a
small fraction of the amount owed, could also impact the value of the Fund’s investments in Puerto Rican municipal securities.
These challenges and uncertainties have been exacerbated by multiple hurricanes and the resulting natural disasters that have stuck Puerto Rico since 2017. The full extent of the natural disasters’ impact on Puerto
Rico’s economy and foreign investment in Puerto Rico is difficult to estimate.
Reinvestment Risk. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if and when
the Fund invests the proceeds from matured, traded or called municipal securities at market interest rates that are below the portfolio’s current earnings rate. A decline in income could affect the common shares’ market price, NAV and/or a common
shareholder’s overall returns.
Sector and Industry Risk. Subject to the concentration limits of the Fund’s investment policies and guidelines,
a Fund may invest a significant portion of its net assets in certain sectors of the municipal securities market, such as hospitals and other health care facilities, charter schools and other private educational facilities, special taxing
districts and start-up utility districts, and private activity bonds including industrial development bonds on behalf of transportation companies such as airline companies, whose credit quality and performance may be more susceptible to economic,
business, political, regulatory and other developments than other sectors of municipal issuers. If the Fund invests a significant portion of its net assets in the sectors noted above, the Fund’s performance may be subject to additional risk and
variability.
Sector Focus Risk. At times, the Fund may focus its investments (i.e., overweight its investments relative to
the overall municipal securities market) in one or more particular sectors, which may subject the Fund to additional risk and variability. Securities issued in the same sector may be similarly affected by economic or market events, making the
Fund more vulnerable to unfavorable developments in that sector than funds that invest more broadly. As the percentage of the Fund’s Managed Assets invested in a particular sector increases, so does the potential for fluctuation in the NAV of the
Fund’s common shares.
Special Considerations Related to New York Concentration Risk. Because the Fund primarily invests in municipal
securities from a single state, the State of New York, the Fund is more susceptible to political, economic or regulatory factors affecting issuers of New York municipal securities. Information regarding the financial condition of the State of New
York is ordinarily included in various public documents issued thereby, such as the official statements prepared in connection with the issuance of general obligation bonds of the State of New York.
Additionally, the State of New York is a party to numerous legal proceedings, many of which normally occur in governmental operations. The creditworthiness of obligations issued by local New York issuers may be
unrelated to the creditworthiness of obligations issued by the State of New York, and that there is no obligation on the part of the State of New York to make payment on such local obligations in the event of default.
Special Risks Related to Certain Municipal Obligations. Municipal leases and certificates of participation
involve special risks not normally associated with general obligations or revenue bonds. Leases and installment purchase or conditional sale contracts (which normally provide for title to the leased asset to pass eventually to the governmental
issuer) have evolved as a means for governmental issuers to acquire property and equipment without meeting the constitutional and statutory requirements for the issuance of debt. The debt issuance limitations are deemed to be inapplicable because
of the inclusion in many leases or contracts of “non-appropriation” clauses that relieve the governmental issuer of any obligation to make future payments under the lease or contract unless money is appropriated for such purpose by the
appropriate legislative body. In addition, such leases or contracts may be subject to the temporary abatement of payments in the event that the governmental issuer is prevented from maintaining occupancy of the leased premises or utilizing the
leased equipment. Although the obligations may be secured by the leased equipment or facilities, the disposition of the
85
Shareholder Update (Unaudited) (continued)
property in the event of non-appropriation or foreclosure might prove difficult, time consuming and costly, and may result in a delay in recovering or the failure to fully recover the Fund’s original investment. In
the event of non-appropriation, the issuer would be in default and taking ownership of the assets may be a remedy available to the Fund, although the Fund does not anticipate that such a remedy would normally be pursued.
Certificates of participation involve the same risks as the underlying municipal leases. In addition, the Fund may be dependent upon the municipal authority issuing the certificates of participation to exercise
remedies with respect to the underlying securities. Certificates of participation also entail a risk of default or bankruptcy, both of the issuer of the municipal lease and also the municipal agency issuing the certificate of participation.
Swap Transactions Risk. The Fund may enter into debt-related derivative instruments such as credit default swap
contracts and interest rate swaps. Like most derivative instruments, the use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions.
In addition, the use of swaps requires an understanding by the adviser and/or the sub-adviser of not only the referenced asset, rate or index, but also of the swap itself. If the investment adviser and/or the sub-adviser is incorrect in its
forecasts of default risks, market spreads or other applicable factors or events, the investment performance of the Fund would diminish compared with what it would have been if these techniques were not used.
Tax Risk. The value of the Fund’s investments and its NAV may be adversely affected by changes in tax rates,
rules and policies. Because interest income from municipal securities is normally not subject to regular federal income taxation, the attractiveness of municipal securities in relation to other investment alternatives is affected by changes in
federal income tax rates or changes in the tax exempt status of interest income from municipal securities. Additionally, the Fund is not a suitable investment for individual retirement accounts, for other tax exempt or tax-deferred accounts, for
investors who are not sensitive to the federal income tax consequences of their investments.
Taxability Risk. The Fund will invest in municipal securities in reliance at the time of purchase on an opinion
of bond counsel to the issuer that the interest paid on those securities will be excludable from gross income for regular federal income tax purposes, and the sub-adviser will not independently verify that opinion. Subsequent to the Fund’s
acquisition of such a municipal security, however, the security may be determined to pay, or to have paid, taxable income. As a result, the treatment of dividends previously paid or to be paid by the Fund as “exempt-interest dividends” could be
adversely affected, subjecting the Fund’s shareholders to increased federal income tax liabilities. Certain other investments made by the Fund, including derivatives transactions, may result in the receipt of taxable income or gains by the Fund.
Tobacco Settlement Bond Risk. The Fund may invest in tobacco settlement bonds. Tobacco settlement bonds are
municipal securities that are backed solely by expected revenues to be derived from lawsuits involving tobacco related deaths and illnesses which were settled between certain states and American tobacco companies. Tobacco settlement bonds are
secured by an issuing state’s proportionate share in the Master Settlement Agreement, an agreement between 46 states and nearly all of the U.S. tobacco manufacturers (the “MSA”). Under the terms of the MSA, the actual amount of future settlement
payments by tobacco-manufacturers is dependent on many factors, including, among other things, reduced cigarette consumption. Payments made by tobacco manufacturers could be negatively impacted if the decrease in tobacco consumption is
significantly greater than the forecasted decline.
Unrated Securities Risk. The Fund may purchase securities that are not rated by any rating organization. The
investment adviser may, after assessing such securities’ credit quality, internally assign ratings to certain of those securities in categories similar to those of rating organizations. Some unrated securities may not have an active trading
market or may be difficult to value, which means the Fund might have difficulty selling them promptly at an acceptable price. To the extent that the Fund invests in unrated securities, the Fund’s ability to achieve its investment objectives will
be more dependent on the investment adviser’s credit analysis than would be the case when the Fund invests in rated securities.
Valuation Risk. The municipal securities in which the Fund invests typically are valued by a pricing service
utilizing a range of market-based inputs and assumptions, including readily available market quotations obtained from broker-dealers making markets in such instruments, cash flows and transactions for comparable instruments. There is no assurance
that the Fund will be able to sell a portfolio security at the price established by the pricing service, which could result in a loss to the Fund. Pricing services generally price municipal securities assuming orderly transactions of an
institutional “round lot” size, but some trades may occur in smaller, “odd lot” sizes, often at lower prices than institutional round lot trades. Different pricing services may incorporate different assumptions and inputs into their valuation
methodologies, potentially resulting in different values for the same securities. As a result, if the Fund were to change pricing services, or if the Fund’s pricing service were to change its valuation methodology, there could be a material
impact, either positive or negative, on the Fund’s NAV.
Zero Coupon Bonds Risk. Because interest on zero coupon bonds is not paid on a current basis, the values of zero
coupon bonds will be more volatile in response to interest rate changes than the values of bonds that distribute income regularly. Although zero coupon bonds generate income for accounting purposes, they do not produce cash flow, and thus the
Fund could be forced to liquidate securities at an inopportune time in order to generate cash to distribute to shareholders as required by tax laws.
Fund Level and Other Risks:
Anti-Takeover Provisions. The Fund’s organizational documents include provisions that could limit the ability of
other entities or persons to acquire control of the Fund or convert the Fund to open-end status. Further, the Fund’s by-laws provide that a shareholder who obtains beneficial ownership of
86
common shares in a “Control Share Acquisition” shall have the same voting rights as other common shares only to the extent authorized by shareholders. These provisions could have the effect of depriving the common
shareholders of opportunities to sell their common shares at a premium over the then-current market price of the common shares.
Counterparty Risk. Changes in the credit quality of the companies that serve as the Fund’s counterparties with
respect to derivatives or other transactions supported by another party’s credit will affect the value of those instruments. Certain entities that have served as counterparties in the markets for these transactions have incurred or may incur in
the future significant financial hardships including bankruptcy and losses as a result of exposure to sub-prime mortgages and other lower-quality credit investments. As a result, such hardships have reduced these entities’ capital and called into
question their continued ability to perform their obligations under such transactions. By using such derivatives or other transactions, the Fund assumes the risk that its counterparties could experience similar financial hardships. In the event
of the insolvency of a counterparty, the Fund may sustain losses or be unable to liquidate a derivatives position.
Cybersecurity Risk. The Fund and its service providers are susceptible to operational and information security
risk resulting from cyber incidents. Cyber incidents refer to both intentional attacks and unintentional events including: processing errors, human errors, technical errors including computer glitches and system malfunctions, inadequate or failed
internal or external processes, market-wide technical-related disruptions, unauthorized access to digital systems (through “hacking” or malicious software coding), computer viruses, and cyber-attacks which shut down, disable, slow or otherwise
disrupt operations, business processes or website access or functionality (including denial of service attacks). Cyber incidents could adversely impact the Fund and cause the Fund to incur financial loss and expense, as well as face exposure to
regulatory penalties, reputational damage, and additional compliance costs associated with corrective measures. In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future. Furthermore, the Fund cannot
control the cybersecurity plans and systems put in place by its service providers or any other third parties whose operations may affect the Fund.
Economic and Political Events Risk. The Fund may be more sensitive to adverse economic, business or political
developments if it invests a substantial portion of its assets in the municipal securities of similar projects (such as those relating to the education, health care, housing, transportation, or utilities industries), industrial development bonds,
or in particular types of municipal securities (such as general obligation bonds, private activity bonds or moral obligation bonds). Such developments may adversely affect a specific industry or local political and economic conditions, and thus
may lead to declines in the creditworthiness and value of such municipal securities.
Global Economic Risk. National and regional economies and financial markets are becoming increasingly
interconnected, which increases the possibilities that conditions in one country, region or market might adversely impact issuers in a different country, region or market. Changes in legal, political, regulatory, tax and economic conditions may
cause fluctuations in markets and securities prices around the world, which could negatively impact the value of the Fund’s investments. Major economic or political disruptions, particularly in large economies like China’s, may have global
negative economic and market repercussions. Additionally, events such as war, terrorism, natural and environmental disasters and the spread of infectious illnesses or other public health emergencies may adversely affect the global economy and the
markets and issuers in which the Fund invests. Recent examples of such events include the outbreak of a novel coronavirus known as COVID-19 that was first detected in China in December 2019 and heightened concerns regarding North Korea’s nuclear
weapons and long-range ballistic missile programs. These events could reduce consumer demand or economic output, result in market closure, travel restrictions or quarantines, and generally have a significant impact on the economy. These events
could also impair the information technology and other operational systems upon which the Fund’s service providers, including the investment adviser and sub-adviser, rely, and could otherwise disrupt the ability of employees of the Fund’s service
providers to perform essential tasks on behalf of the Fund. Governmental and quasi-governmental authorities and regulators throughout the world have in the past responded to major economic disruptions with a variety of significant fiscal and
monetary policy changes, including but not limited to, direct capital infusions into companies, new monetary programs and dramatically lower interest rates. An unexpected or quick reversal of these policies, or the ineffectiveness of these
policies, could increase volatility in securities markets, which could adversely affect the Fund’s investments.
Investment and Market Risk. An investment in common shares is subject to investment risk, including the possible
loss of the entire principal amount that you invest. Common shares frequently trade at a discount to their NAV. An investment in common shares represents an indirect investment in the securities owned by the Fund. Common shares at any point in
time may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions.
Legislation and Regulatory Risk. At any time after the date of this report, legislation or additional
regulations may be enacted that could negatively affect the assets of the Fund, securities held by the Fund or the issuers of such securities. Fund shareholders may incur increased costs resulting from such legislation or additional regulation.
There can be no assurance that future legislation, regulation or deregulation will not have a material adverse effect on the Fund or will not impair the ability of the Fund to achieve its investment objectives.
The SEC recently adopted rules governing the use of derivatives by registered investment companies, which could affect the nature and extent of derivatives used by the Fund. The full impact of such rules is uncertain
at this time. It is possible that such rules, as interpreted, applied and enforced by the SEC, could limit the implementation of the Fund’s use of derivatives, which could have an adverse impact on the Fund.
87
Shareholder Update (Unaudited) (continued)
Leverage Risk. The use of leverage creates special risks for common shareholders, including potential interest
rate risks and the likelihood of greater volatility of NAV and market price of, and distributions on, the common shares. The use of leverage in a declining market will likely cause a greater decline in the Fund’s NAV, which may result at a
greater decline of the common share price, than if the Fund were not to have used leverage.
The Fund will pay (and common shareholders will bear) any costs and expenses relating to the Fund’s use of leverage, which will result in a reduction in the Fund’s NAV. The investment adviser may, based on its
assessment of market conditions and composition of the Fund’s holdings, increase or decrease the amount of leverage. Such changes may impact the Fund’s distributions and the price of the common shares in the secondary market.
The Fund may seek to refinance its leverage over time, in the ordinary course, as current forms of leverage mature or it is otherwise desirable to refinance; however, the form that such leverage will take cannot be
predicted at this time. If the Fund is unable to replace existing leverage on comparable terms, its costs of leverage will increase. Accordingly, there is no assurance that the use of leverage may result in a higher yield or return to common
shareholders.
The amount of fees paid to the investment adviser and the sub-adviser for investment advisory services will be higher if the Fund uses leverage because the fees will be calculated based on the Fund’s Managed Assets -
this may create an incentive for the investment adviser and the sub-adviser to leverage the Fund or increase the Fund’s leverage.
Market Discount from Net Asset Value. Shares of closed-end investment companies like the Fund frequently trade
at prices lower than their NAV. This characteristic is a risk separate and distinct from the risk that the Fund’s NAV could decrease as a result of investment activities. Whether investors will realize gains or losses upon the sale of the common
shares will depend not upon the Fund’s NAV but entirely upon whether the market price of the common shares at the time of sale is above or below the investor’s purchase price for the common shares. Furthermore, management may have difficulty
meeting the Fund’s investment objectives and managing its portfolio when the underlying securities are redeemed or sold during periods of market turmoil and as investors’ perceptions regarding closed-end funds or their underlying investments
change. Because the market price of the common shares will be determined by factors such as relative supply of and demand for the common shares in the market, general market and economic circumstances, and other factors beyond the control of the
Fund, the Fund cannot predict whether the common shares will trade at, below or above NAV. The common shares are designed primarily for long-term investors, and you should not view the Fund as a vehicle for short-term trading purposes.
Recent Market Conditions. In response to the financial crisis and recent market events, policy and legislative
changes by the United States government and the Federal Reserve to assist in the ongoing support of financial markets, both domestically and in other countries, are changing many aspects of financial regulation. The impact of these changes on the
markets, and the practical implications for market participants, may not be fully known for some time. Withdrawal of government support, failure of efforts in response to the crisis, or investor perception that such efforts are not succeeding,
could adversely impact the value and liquidity of certain securities. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations, including changes in tax
laws and the imposition of trade barriers. The impact of new financial regulation legislation on the markets and the practical implications for market participants may not be fully known for some time. Changes to the Federal Reserve policy may
affect the value, volatility and liquidity of dividend and interest paying securities. In addition, the contentious domestic political environment, as well as political and diplomatic events within the United States and abroad, such as the U.S.
government’s inability at times to agree on a long-term budget and deficit reduction plan, the threat of a federal government shutdown and threats not to increase the federal government’s debt limit, may affect investor and consumer confidence
and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree.
Interest rates have been unusually low in recent years in the United States and abroad but there is consensus that interest rates will increase during the life of the Fund, which could negatively impact the price of
debt securities. Because there is little precedent for this situation, it is difficult to predict the impact of a significant rate increase on various markets.
The current political climate has intensified concerns about a potential trade war between China and the United States, as each country has recently imposed tariffs on the other country’s products. These actions may
trigger a significant reduction in international trade, the oversupply of certain manufactured goods, substantial price reductions of goods and possible failure of individual companies and/or large segments of China’s export industry, which could
have a negative impact on the Fund’s performance.
The impact of these developments in the near- and long-term is unknown and could have additional adverse effects on economies, financial markets and asset valuations around the world.
Reverse Repurchase Agreement Risk. A reverse repurchase agreement, in economic essence, constitutes a
securitized borrowing by the Fund from the security purchaser. The Fund may enter into reverse repurchase agreements for the purpose of creating a leveraged investment exposure and, as such, their usage involves essentially the same risks
associated with a leveraging strategy generally since the proceeds from these agreements may be invested in additional portfolio securities. Reverse repurchase agreements tend to be short-term in tenor, and there can be no assurances that the
purchaser (lender) will commit to extend or “roll” a given agreement upon its agreed-upon repurchase date or an alternative purchaser can be identified on similar terms. Reverse repurchase agreements also involve the risk that the purchaser fails
to return the securities as agreed upon, files for bankruptcy or becomes insolvent. The Fund may be restricted from taking normal portfolio actions during such time, could be subject to loss to the
88
extent that the proceeds of the agreement are less than the value of securities subject to the agreement and may experience adverse tax consequences.
EFFECTS OF LEVERAGE
The following table is furnished in response to requirements of the SEC. It is designed to illustrate the effects of leverage through the use of senior securities, as that term is defined under Section 18 of the 1940
Act, as well as certain other forms of leverage, such as reverse repurchase agreements and investments in inverse floating rate securities, on common share total return, assuming investment portfolio total returns (consisting of income and changes
in the value of investments held in a Fund’s portfolio) of -10%, -5%, 0%, 5% and 10%. The table below reflects each Fund’s (i) continued use of leverage as of February 28, 2021 as a percentage of Managed Assets (including assets attributable to
such leverage), (ii) the estimated annual effective interest expense rate payable by the Fund on such instruments (based on actual leverage costs incurred during the fiscal year ended February 28, 2021) as set forth in the table, and (iii) the
annual return that the Fund’s portfolio must experience (net of expenses) in order to cover such costs of leverage based on such estimated annual effective interest expense rate. The information below does not reflect any Fund’s use of certain
other forms of economic leverage achieved through the use of other instruments or transactions not considered to be senior securities under the 1940 Act, such as certain derivative instruments and investments in inverse floating rate securities.
The numbers are merely estimates, used for illustration. The costs of leverage may vary frequently and may be significantly higher or lower than the estimated rate. The assumed investment portfolio returns in the
table below are hypothetical figures and are not necessarily indicative of the investment portfolio returns experienced or expected to be experienced by the Fund. Your actual returns may be greater or less than those appearing below.
|
|
|
|
|
Nuveen
|
|
Nuveen
|
New York
|
|
New York
|
AMT-Free
|
|
Quality
|
Quality
|
|
Municipal
|
Municipal
|
|
Income
|
Income
|
|
Fund
|
Fund
|
|
(NAN)
|
(NRK)
|
Estimated Leverage as a Percentage of Managed Assets (Including Assets Attributable to Leverage)
|
36.82%
|
37.44%
|
Estimated Annual Effective Leverage Expense Rate Payable by Fund on Leverage
|
1.25%
|
1.33%
|
Annual Return Fund Portfolio Must Experience (net of expenses) to Cover Estimated Annual Effective Interest Expense Rate on Leverage
|
0.46%
|
0.50%
|
Common Share Total Return for (10.00)% Assumed Portfolio Total Return
|
-16.56%
|
-16.78%
|
Common Share Total Return for (5.00)% Assumed Portfolio Total Return
|
-8.64%
|
-8.79%
|
Common Share Total Return for 0.00% Assumed Portfolio Total Return
|
-0.73%
|
-0.80%
|
Common Share Total Return for 5.00% Assumed Portfolio Total Return
|
7.18%
|
7.20%
|
Common Share Total Return for 10.00% Assumed Portfolio Total Return
|
15.10%
|
15.19%
|
Common Share total return is composed of two elements — the distributions paid by a Fund to holders of common shares (the amount of which is largely determined by the net investment income of the Fund after paying
dividend payments on any preferred shares issued by the Fund and expenses on any forms of leverage outstanding) and gains or losses on the value of the securities and other instruments the Fund owns. As required by SEC rules, the table assumes that
a Fund is more likely to suffer capital losses than to enjoy capital appreciation. For example, to assume a total return of 0%, a Fund must assume that the income it receives on its investments is entirely offset by losses in the value of those
investments. This table reflects hypothetical performance of a Fund’s portfolio and not the actual performance of the Fund’s common shares, the value of which is determined by market forces and other factors. Should a Fund elect to add additional
leverage to its portfolio, any benefits of such additional leverage cannot be fully achieved until the proceeds resulting from the use of such leverage have been received by the Fund and invested in accordance with the Fund’s investment objectives
and policies. As noted above, a Fund’s willingness to use additional leverage, and the extent to which leverage is used at any time, will depend on many factors.
89
Shareholder Update (Unaudited) (continued)
DIVIDEND REINVESTMENT PLAN
Nuveen Closed-End Funds Automatic Reinvestment Plan
Your Nuveen Closed-End Fund allows you to conveniently reinvest distributions in additional Fund shares. By choosing to reinvest, you’ll be able to invest money regularly and automatically, and watch your investment
grow through the power of compounding. Just like distributions in cash, there may be times when income or capital gains taxes may be payable on distributions that are reinvested. It is important to note that an automatic reinvestment plan does not
ensure a profit, nor does it protect you against loss in a declining market.
Easy and convenient
To make recordkeeping easy and convenient, each month you’ll receive a statement showing your total distributions, the date of investment, the shares acquired and the price per share, and the total number of shares
you own.
How shares are purchased
The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above NAV at the time of valuation, the Fund will issue new shares at the
greater of the NAV or 95% of the then-current market price. If the shares are trading at less than NAV, shares for your account will be purchased on the open market. If Computershare Trust Company, N.A. (the “Plan Agent”) begins purchasing Fund
shares on the open market while shares are trading below NAV, but the Fund’s shares subsequently trade at or above their NAV before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the
uninvested portion of the distribution in newly-issued Fund shares at a price equal to the greater of the shares’ NAV or 95% of the shares’ market value on the last business day immediately prior to the purchase date. Distributions received to
purchase shares in the open market will normally be invested shortly after the distribution payment date. No interest will be paid on distributions awaiting reinvestment. Because the market price of the shares may increase before purchases are
completed, the average purchase price per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the distribution had been paid in shares issued by the Fund. A pro rata portion of any
applicable brokerage commissions on open market purchases will be paid by Dividend Reinvestment Plan (the “Plan”) participants. These commissions usually will be lower than those charged on individual transactions.
Flexible
You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change. You can reinvest whether your shares are registered in your name, or in the name of a brokerage
firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to
participate in the Plan. The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to
participants in the Plan at this time.
Call today to start reinvesting distributions
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial professional or call us at (800) 257-8787.
90
CHANGES OCCURRING DURING THE FISCAL YEAR
The following information in this annual report is a summary of certain changes during the most recent fiscal year. This information may not reflect all of the changes that have occurred since you
purchased shares of a Fund.
During the most recent fiscal year, there have been no changes to: (i) the Funds’ investment objectives and principal investment policies that have not been approved by shareholders, (ii) the principal risks of the
Fund, (iii) the portfolio managers of the Funds; (iv) a Fund’s charter or by-laws that would delay or prevent a change of control of the Fund that have not been approved by shareholders except as follows:
Amended and Restated By-Laws
On October 5, 2020, after a rigorous and deliberative review, and consistent with the interests of the Nuveen New York Quality Municipal Income Fund (“NAN”) and the Nuveen New York AMT-Free Quality Municipal Income
Fund (“NRK”) long-term shareholders, the Board of Trustees of each Fund adopted Amended and Restated By-Laws. On April 12, 2021 the Nuveen New York Municipal Value Fund (“NNY”) (each of NAN, NRK and NNY, a “Fund” and collectively the “Funds”)
completed a change in domicile reorganization from a Minnesota corporation to a Massachusetts business trust. In connection with the reorganization, NNY adopted the same Amended and Restated By-Laws.
Among other changes, the Amended and Restated By-Laws require compliance with certain amended deadlines and procedural and informational requirements in connection with advance notice of shareholder proposals or
nominations, including certain information about the proponent and the proposal, or in the case of a nomination, the nominee. Any shareholder considering making a nomination or other proposal should carefully review and comply with those provisions
of the Amended and Restated By-Laws.
The Amended and Restated By-Laws also include provisions (the “Control Share By-Law”) pursuant to which, in summary, a shareholder who obtains beneficial ownership of common shares of a Fund in a “Control Share
Acquisition” may exercise voting rights with respect to such shares only to the extent the authorization of such voting rights is approved by other shareholders of the Fund. The Control Share By-Law is primarily intended to protect the interests of
the Fund and its long-term shareholders by limiting the risk that the Fund will become subject to undue influence by opportunistic traders pursuing short-term agendas adverse to the best interests of the Fund and its long-term shareholders. The
Control Share By-Law does not eliminate voting rights for common shares acquired in Control Share Acquisitions, but rather entrusts the Fund’s other “non-interested” shareholders with determining whether to approve the authorization of the voting
rights of the person acquiring such shares.
Subject to various conditions and exceptions, the Control Share By-Law defines a “Control Share Acquisition” to include an acquisition of common shares that, but for the Control Share By-Law, would give the beneficial
owner, upon the acquisition of such shares, the ability to exercise voting power in the election of Trustees of a Fund in any of the following ranges:
(i) one-tenth or more, but less than one-fifth of all voting power;
(ii) one-fifth or more, but less than one-third of all voting power;
(iii) one-third or more, but less than a majority of all voting power; or
(iv) a majority or more of all voting power.
The Control Share By-Law generally excludes certain acquisitions of common shares from the definition of a Control Share Acquisition, including acquisitions of common shares that occurred prior to October 5, 2020,
though such shares are included in assessing whether any subsequent share acquisition exceeds one of the enumerated thresholds.
Subject to certain conditions and procedural requirements set forth in the Control Share By-Law, including the delivery of a “Control Share Acquisition Statement” to the Funds’ Secretary setting forth certain required
information, a shareholder who obtains or proposes to obtain beneficial ownership of common shares in a Control Share Acquisition generally may demand a special meeting of shareholders for the purpose of considering whether the voting rights of
such acquiring person with respect to such shares shall be authorized.
This discussion is only a high-level summary of certain aspects of the Amended and Restated By-Laws, and is qualified in its entirety by reference to the Amended and Restated By-Laws. Shareholders should refer to the
Amended and Restated By-Laws for more information. A copy of the Amended and Restated By-Laws can be found in the Current Report on Form 8-K filed by the Funds with the Securities and Exchange Commission on October 6, 2020, which is available at
www.sec.gov, and may also be obtained by writing to the Secretary of the Funds at 333 West Wacker Drive, Chicago, Illinois 60606.
91
Shareholder Update (Unaudited) (continued)
CERTAIN CHANGES AFTER THE FISCAL YEAR END
Fund Reorganization
As noted in the Notes to this annual report, the Board of Directors/Trustees (the “Board”) of Nuveen New York Municipal Value Fund 2 (“NYV”) and NNY approved the reorganization of NYV (the “Target
Fund”) into NNY (the “Acquiring Fund”) (the “Reorganization”) during August 2020. The Reorganization was approved by shareholders of the Target Fund at a special meeting on January 15, 2021, and was completed before the opening of business on April
12, 2021.
Upon the closing of the Reorganization, NYV transferred its assets to NNY in exchange for common shares of NNY and the assumption by NNY of the liabilities of NYV. NYV was then liquidated, dissolved
and terminated in accordance with its Declaration of Trust. Shareholders of NYV became shareholders of NNY. Holders of common shares of NYV received newly issued common shares of NNY, the aggregate NAV of which is equal to the aggregate NAV of the
common shares of NYV held immediately prior to the Reorganization (including for this purpose fractional Acquiring Fund shares to which shareholders would be entitled).
In conjunction with the Reorganization, shareholders of NNY approved a change of domicile reorganization from a Minnesota corporation to a Massachusetts business trust. Upon completion of the change of
domicile, NNY removed “Inc.” from its name and became Nuveen New York Municipal Value Fund.
92
Additional Fund
Information (Unaudited)
|
|
|
|
|
|
|
|
Board of Directors/Trustees
|
|
|
|
|
|
|
Jack B. Evans
|
William C. Hunter
|
Albin F. Moschner
|
John K. Nelson
|
Judith M. Stockdale
|
Carole E. Stone
|
|
Terence J. Toth
|
Matthew Thornton III
|
Margaret L. Wolff
|
Robert L. Young
|
|
|
|
|
|
Investment Adviser
|
Custodian
|
Legal Counsel
|
Independent Registered
|
Transfer Agent and
|
|
Nuveen Fund Advisors, LLC
|
State Street Bank
|
Chapman and Cutler LLP
|
Public Accounting Firm
|
Shareholder Services
|
|
333 West Wacker Drive
|
& Trust Company
|
Chicago, IL 60603
|
KPMG LLP
|
|
Computershare Trust
|
|
Chicago, IL 60606
|
One Lincoln Street
|
|
200 East Randolph Street
|
Company, N.A.
|
|
|
Boston, MA 02111
|
|
Chicago, IL 60601
|
150 Royall Street
|
|
|
|
|
|
|
Canton, MA 02021
|
|
|
|
|
|
|
(800) 257-8787
|
|
|
Portfolio of Investments Information
|
|
|
|
|
|
|
Each Fund is required to file its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal
|
year as an exhibit to its report on Form N-PORT. You may obtain this information on the SEC’s website at http://www.sec.gov.
|
|
|
|
|
Nuveen Funds’ Proxy Voting Information
|
|
|
|
|
|
|
You may obtain (i) information regarding how each fund voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30,
|
without charge, upon request, by calling Nuveen toll-free at (800) 257-8787 or on Nuveen’s website at www.nuveen.com and (ii) a description of the policies and
|
procedures that each fund used to determine how to vote proxies relating to portfolio securities without charge, upon request, by calling Nuveen toll free at
|
(800) 257-8787. You may also obtain this information directly from the SEC. Visit the SEC on-line at http://www.sec.gov.
|
|
|
|
|
|
|
CEO Certification Disclosure
|
|
|
|
|
|
|
Each Fund’s Chief Executive Officer (CEO) has submitted to the New York Stock Exchange (NYSE) the annual CEO certification as required by Section 303A.12(a)
|
of the NYSE Listed Company Manual. Each Fund has filed with the SEC the certification of its CEO and Chief Financial Officer required by Section 302 of
the Sarbanes-Oxley Act.
|
|
|
Common Share Repurchases
|
|
|
|
|
|
|
Each Fund intends to repurchase, through its open-market share repurchase program, shares of its own common stock at such times and in such amounts as is
|
deemed advisable. During the period covered by this report, each Fund repurchased shares of its common stock as shown in the accompanying table.
|
Any future repurchases will be reported to shareholders in the next annual or semi-annual report.
|
|
|
|
|
|
|
|
|
NNY
|
NAN
|
NRK
|
|
Common shares repurchased
|
0
|
0
|
0
|
|
FINRA BrokerCheck
|
|
|
|
|
|
|
|
The Financial Industry Regulatory Authority (FINRA) provides information regarding the disciplinary history of FINRA member firms and associated investment
|
professionals. This information as well as an investor brochure describing FINRA BrokerCheck is available to the public by calling the FINRA BrokerCheck
|
Hotline number at (800) 289-9999 or by visiting www.FINRA.org.
|
93
Glossary of Terms
Used in this Report (Unaudited)
■ Average Annual Total Return: This is a commonly used method to express an investment’s performance
over a particular, usually multi-year time period. It expresses the return that would have been necessary each year to equal the investment’s actual cumulative performance (including change in NAV or market price and reinvested dividends and
capital gains distributions, if any) over the time period being considered.
■ Duration: Duration is a measure of the expected period over which a bond’s principal and interest
will be paid, and consequently is a measure of the sensitivity of a bond’s or bond fund’s value to changes when market interest rates change. Generally, the longer a bond’s or fund’s duration, the more the price of the bond or fund will change as
interest rates change.
■ Effective Leverage: Effective leverage is a fund’s effective economic leverage, and includes both
regulatory leverage (see leverage) and the leverage effects of certain derivative investments in the fund’s portfolio. Currently, the leverage effects of Tender Option Bond (TOB) inverse floater holdings are included in effective leverage values,
in addition to any regulatory leverage.
■ Gross Domestic Product (GDP): The total market value of all final goods and services produced in a
country/region in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.
■ Inverse Floating Rate Securities: Inverse floating rate
securities, also known as inverse floaters or tender option bonds (TOBs), are created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust. This trust, in turn, (a) issues floating rate certificates
typically paying short-term tax-exempt interest rates to third parties in amounts equal to some fraction of the deposited bond’s par amount or market value, and (b) issues an inverse floating rate certificate (sometimes referred to as an “inverse
floater”) to an investor (such as a Fund) interested in gaining investment exposure to a long-term municipal bond. The income received by the holder of the inverse floater varies inversely with the short-term rate paid to the floating rate
certificates’ holders, and in most circumstances the holder of the inverse floater bears substantially all of the underlying bond’s downside investment risk. The holder of the inverse floater typically also benefits disproportionately from any
potential appreciation of the underlying bond’s value.
Hence, an inverse floater essentially represents an investment in the underlying bond on a leveraged basis.
■ Leverage: Leverage is created whenever a fund has investment exposure (both reward and/or risk)
equivalent to more than 100% of the investment capital.
■ Net Asset Value (NAV) Per Share: A fund’s Net Assets is equal to its total assets (securities,
cash, accrued earnings and receivables) less its total liabilities. NAV per share is equal to the fund’s Net Assets divided by its number of shares outstanding.
■ Pre-Refunding: Pre-Refunding, also known as advanced refundings or refinancings, is a procedure
used by state and local governments to refinance municipal bonds to lower interest expenses. The issuer sells new bonds with a lower yield and uses the proceeds to buy U.S. Treasury securities, the interest from which is used to make payments on
the higher-yielding bonds. Because of this collateral, pre-refunding generally raises a bond’s credit rating and thus its value.
■ Regulatory Leverage: Regulatory Leverage consists of preferred shares issued by or borrowings of a
fund. Both of these are part of a fund’s capital structure. Regulatory leverage is subject to asset coverage limits set in the Investment Company Act of 1940.
94
■ S&P Municipal Bond Index: An unleveraged, market value-weighted index designed to measure the
performance of the tax-exempt, investment-grade U.S. municipal bond market. Index returns assume reinvestment of distributions, but do not reflect any applicable sales charges or management fees.
■ S&P Municipal Bond New York Index: An unleveraged, market value-weighted index designed to
measure the performance of the tax-exempt, investment-grade New York municipal bond market. Index returns assume reinvestment of distributions, but do not reflect any applicable sales charges or management fees.
■ Total Investment Exposure: Total investment exposure is a fund’s assets managed by the Adviser
that are attributable to financial leverage. For these purposes, financial leverage includes a fund’s use of preferred stock and borrowings and investments in the residual interest certificates (also called inverse floating rate securities) in
tender option bond (TOB) trusts, including the portion of assets held by a TOB trust that has been effectively financed by the trust’s issuance of floating rate securities.
■ Zero Coupon Bond: A zero coupon bond does not pay a regular interest coupon to its holders during
the life of the bond. Income to the holder of the bond comes from accretion of the difference between the original purchase price of the bond at issuance and the par value of the bond at maturity and is effectively paid at maturity. The market
prices of zero coupon bonds generally are more volatile than the market prices of bonds that pay interest periodically.
95
Annual Investment
Management Agreement Approval Process (Unaudited)
The Board of Directors (the “Board” and each Director, a “Board Member”) of Nuveen New York Municipal Value Fund, Inc. (the “New York Fund”),
which was comprised entirely of Board Members who were not “interested persons” (as defined under the Investment Company Act of 1940 (the “1940 Act”)) (“Independent Board
Members”), was responsible for determining whether to approve the New York Fund’s investment management agreement (the “Investment Management Agreement”) between such fund and Nuveen Fund Advisors,
LLC (the “Adviser”), and sub-advisory agreement (the “Sub-Advisory Agreement”) between the Adviser and Nuveen Asset Management, LLC (the “Sub-Adviser”). At a meeting held on May 19-21, 2020 (the “May Meeting”) at which it conducted its annual review of the advisory arrangements of the New York Fund, the Board approved the
renewal of the Investment Management Agreement and the Sub-Advisory Agreement for the New York Fund (referred to collectively as the “May Advisory Agreements”). (A discussion of the Board’s approval at the
May Meeting of the May Advisory Agreements is included in the New York Fund’s semi-annual report for the period ended August 31, 2020.)
In addition, in 2020, the Board was apprised of the potential reorganization of Nuveen New York Municipal Value Fund 2 into the New York Fund and, in connection therewith, the potential change-of-domicile
reorganization (the “Domicile Change Reorganization”) to convert the New York Fund from a Minnesota corporation (the “Predecessor Fund”) to a Massachusetts business
trust (the “Successor Fund”) to be known as Nuveen New York Municipal Value Fund.
In order to permit the Adviser and the Sub-Adviser to continue to serve as investment adviser and sub-adviser, respectively, to the Successor Fund upon the closing of the Domicile Change Reorganization (following
shareholder approval of the Domicile Change Reorganization), at a meeting held on November 16-18, 2020 (the “November Meeting”), the Board of Trustees of the Successor Fund (the “Successor Board” and each Trustee, a “Board Member”), which is comprised entirely of Independent Board Members, was asked to consider and approve an investment management agreement between
the Adviser and the Successor Fund and a sub-advisory agreement between the Adviser and the Sub-Adviser on behalf of the Successor Fund (collectively, the “New Advisory Agreements”). Given that the change of domicile was not expected to reduce the
level or nature of services provided and that the New Advisory Agreements would be substantially similar to the respective May Advisory Agreements, the factors considered and determinations made at the May Meeting in approving the Adviser and the
Sub-Adviser as investment adviser and sub-adviser, respectively, to the Predecessor Fund were also applicable to the approval of the New Advisory Agreements for the Successor Fund. Accordingly, at the November Meeting, the Board Members of the
Successor Board approved the New Advisory Agreements.
Although the 1940 Act requires that approvals of a fund’s advisory arrangements be approved by the in-person vote of a majority of the independent board members of the applicable board, the May Meeting and the
November Meeting were each held virtually through the internet in view of the health risks associated with holding an in-person meeting during the COVID-19 pandemic and governmental restrictions on gatherings. The May Meeting and the November
Meeting were held in reliance on an order issued by the Securities and Exchange Commission on March 13, 2020, as extended on March 25, 2020, and in conjunction with the November Meeting, as further extended on June 19, 2020; such order provided
registered investment companies temporary relief from the in-person voting requirements of the 1940 Act with respect to the approval of a fund’s advisory agreement in response to the challenges arising in connection with the COVID-19 pandemic.
96
Board Members &
Officers (Unaudited)
The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board of Trustees of the Funds. None of the trustees who
are not “interested” persons of the Funds (referred to herein as “independent board members”) has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the trustees and officers of the
Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each Trustee oversees and other directorships they hold are set forth below.
Name,
|
Position(s) Held
|
Year First
|
Principal
|
Number
|
Year of Birth
|
with the Funds
|
Elected or
|
Occupation(s)
|
of Portfolios
|
& Address
|
|
Appointed
|
Including other
|
in Fund
|
|
|
and Term(1)
|
Directorships
|
Complex
|
|
|
|
During Past
|
Overseen by
|
|
|
|
5 Years
|
Board Member
|
Independent Board Members:
|
|
|
|
|
■ TERENCE J. TOTH
|
|
|
Formerly, a Co-Founding Partner, Promus Capital (investment advisory
|
|
1959
|
|
|
firm) (2008-2017); Director, Quality Control Corporation (manufacturing)
|
|
333 W. Wacker Drive
|
Chair and
|
2008
|
(since 2012); member: Catalyst Schools of Chicago Board (since 2008)
|
142
|
Chicago, IL 6o6o6
|
Board Member
|
Class II
|
and Mather Foundation Board (philanthropy) (since 2012), and chair of
|
|
|
|
|
its Investment Committee; formerly, Director, Fulcrum IT Services LLC
|
|
|
|
|
(information technology services firm to government entities) (2010-2019);
|
|
|
|
|
formerly, Director, Legal & General Investment Management America, Inc.
|
|
|
|
|
(asset management) (2008-2013); formerly, CEO and President, Northern
|
|
|
|
|
Trust Global Investments (financial services) (2004-2007): Executive Vice
|
|
|
|
|
President, Quantitative Management & Securities Lending (2000-2004);
|
|
|
|
|
prior thereto, various positions with Northern Trust Company (financial
|
|
|
|
|
services) (since 1994); formerly, Member, Northern Trust Mutual Funds
|
|
|
|
|
Board (2005-2007), Northern Trust Global Investments Board (2004-2007),
|
|
|
|
|
Northern Trust Japan Board (2004-2007), Northern Trust Securities Inc.
|
|
|
|
|
Board (2003-2007) and Northern Trust Hong Kong Board (1997-2004).
|
|
|
■ JACK B. EVANS
|
|
|
Chairman (since 2019), formerly, President (1996-2019), The Hall-Perrine
|
|
1948
|
|
|
Foundation, (private philanthropic corporation); Director and Chairman
|
|
333 W. Wacker Drive
|
Board Member
|
1999
|
(since 2009), United Fire Group, a publicly held company; formerly,
|
142
|
Chicago, IL 6o6o6
|
|
Class III
|
Director, Public Member, American Board of Orthopaedic Surgery
|
|
|
|
|
(2015-2020); Life Trustee of Coe College and the Iowa College Foundation;
|
|
|
|
|
formerly, Member and President Pro-Tem of the Board of Regents for the
|
|
|
|
|
State of Iowa University System (2000- 2004); formerly, Director
|
|
|
|
|
(2000-2004), Alliant Energy; formerly, Director (1996- 2015), The Gazette
|
|
|
|
|
Company (media and publishing); formerly, Director (1998- 2003), Federal
|
|
|
|
|
Reserve Bank of Chicago; formerly, President and Chief Operating Officer
|
|
|
|
|
(1972-1995), SCI Financial Group, Inc., (regional financial services firm).
|
|
|
■ WILLIAM C. HUNTER
|
|
|
Dean Emeritus, formerly, Dean, Tippie College of Business, University of
|
|
1948
|
|
|
Iowa (2006-2012); Director of Wellmark, Inc. (since 2009); past Director
|
|
333 W. Wacker Drive
|
Board Member
|
2003
|
(2005-2015), and past President (2010-2014) Beta Gamma Sigma, Inc.,
|
142
|
Chicago, IL 6o6o6
|
|
Class I
|
The International Business Honor Society; formerly, Director (2004-2018)
|
|
|
|
|
of Xerox Corporation; Dean and Distinguished Professor of Finance,
|
|
|
|
|
School of Business at the University of Connecticut (2003-2006);
|
|
|
|
|
previously, Senior Vice President and Director of Research at the Federal
|
|
|
|
|
Reserve Bank of Chicago (1995-2003); formerly, Director (1997-2007),
|
|
|
|
|
Credit Research Center at Georgetown University.
|
|
97
Board Members & Officers (Unaudited) (continued)
|
|
|
|
|
Name,
|
Position(s) Held
|
Year First
|
Principal
|
Number
|
Year of Birth
|
with the Funds
|
Elected or
|
Occupation(s)
|
of Portfolios
|
& Address
|
|
Appointed
|
Including other
|
in Fund
|
|
|
and Term(1)
|
Directorships
|
Complex
|
|
|
|
During Past
|
Overseen by
|
|
|
|
5 Years
|
Board Member
|
|
Independent Board Members (continued):
|
|
|
|
|
|
■ ALBIN F. MOSCHNER
|
|
|
Founder and Chief Executive Officer, Northcroft Partners, LLC,
|
|
1952
|
|
|
(management consulting) (since 2012); formerly, Chairman (2019),
|
|
333 W. Wacker Drive
|
Board Member
|
2016
|
and Director (2012-2019), USA Technologies, Inc., (provider of
|
142
|
Chicago, IL 6o6o6
|
|
Class III
|
solutions and services to facilitate electronic payment transactions);
|
|
|
|
|
formerly, Director, Wintrust Financial Corporation (1996-2016);
|
|
|
|
|
previously, held positions at Leap Wireless International, Inc., (consumer
|
|
|
|
|
wireless services) including Consultant (2011-2012), Chief Operating
|
|
|
|
|
Officer (2008-2011), and Chief Marketing Officer (2004-2008); formerly,
|
|
|
|
|
President, Verizon Card Services division of Verizon Communications,
|
|
|
|
|
Inc. (2000-2003); formerly, President, One Point Services at One Point
|
|
|
|
|
Communications (telecommunication services) (1999-2000); formerly,
|
|
|
|
|
Vice Chairman of the Board, Diba, Incorporated (internet technology
|
|
|
|
|
provider) (1996-1997); formerly, various executive positions (1991-1996)
|
|
|
|
|
and Chief Executive Officer (1995-1996) of Zenith Electronics Corporation
|
|
|
|
|
(consumer electronics).
|
|
|
■ JOHN K. NELSON
|
|
|
Member of Board of Directors of Core12 LLC. (private firm which develops
|
|
1962
|
|
|
branding, marketing and communications strategies for clients) (since
|
|
333 W. Wacker Drive
|
Board Member
|
2013
|
2008); served on The President’s Council of Fordham University (2010-
|
142
|
Chicago, IL 6o6o6
|
|
Class II
|
2019) and previously a Director of the Curran Center for Catholic American
|
|
|
|
|
Studies (2009-2018); formerly, senior external advisor to the Financial
|
|
|
|
|
Services practice of Deloitte Consulting LLP. (2012-2014); former Chair of
|
|
|
|
|
the Board of Trustees of Marian University (2010-2014 as trustee, 2011-2014
|
|
|
|
|
as Chair); formerly Chief Executive Officer of ABN AMRO Bank N.V., North
|
|
|
|
|
America, and Global Head of the Financial Markets Division (2007-2008),
|
|
|
|
|
with various executive leadership roles in ABN AMRO Bank N.V. between
|
|
|
|
|
1996 and 2007.
|
|
|
■ JUDITH M. STOCKDALE
|
|
|
Board Member, Land Trust Alliance (national public charity addressing
|
|
1947
|
|
|
natural land and water conservation in the U.S.) (since 2013); formerly,
|
|
333 W. Wacker Drive
|
Board Member
|
1997
|
Board Member, U.S. Endowment for Forestry and Communities
|
142
|
Chicago, IL 6o6o6
|
|
Class I
|
(national endowment addressing forest health, sustainable forest
|
|
|
|
|
production and markets, and economic health of forest-reliant communities
|
|
|
|
|
in the U.S.) (2013-2019); formerly, Executive Director (1994-2012), Gaylord
|
|
|
|
|
and Dorothy Donnelley Foundation (private foundation endowed to support
|
|
|
|
|
both natural land conservation and artistic vitality); prior thereto, Executive
|
|
|
|
|
Director, Great Lakes Protection Fund (1990-1994).
|
|
|
■ CAROLE E. STONE
|
|
|
Former Director, Chicago Board Options Exchange, Inc. (2006-2017); and
|
|
1947
|
|
|
C2 Options Exchange, Incorporated (2009-2017); formerly, Director, Cboe,
|
|
333 W. Wacker Drive
|
Board Member
|
2007
|
Global Markets, Inc. (2010-2020) (formerly named CBOE Holdings, Inc.;
|
142
|
Chicago, IL 6o6o6
|
|
Class I
|
formerly, Commissioner, New York State Commission on Public
|
|
|
|
|
Authority Reform (2005-2010).
|
|
98
Name,
|
Position(s) Held
|
Year First
|
Principal
|
Number
|
Year of Birth
|
with the Funds
|
Elected or
|
Occupation(s)
|
of Portfolios
|
& Address
|
|
Appointed
|
Including other
|
in Fund
|
|
|
and Term(1)
|
Directorships
|
Complex
|
|
|
|
During Past
|
Overseen by
|
|
|
|
5 Years
|
Board Member
|
Independent Board Members (continued):
|
|
|
|
|
|
■ MATTHEW THORNTON III
|
|
Formerly, Executive Vice President and Chief Operating Officer (2018-2019),
|
|
1958
|
|
|
FedEx Freight Corporation, a subsidiary of FedEx Corporation (“FedEx”)
|
|
333 W. Wacker Drive
|
Board Member
|
2020
|
(provider of transportation, e-commerce and business services through its
|
142
|
Chicago, IL 6o6o6
|
|
Class III
|
portfolio of companies); formerly, Senior Vice President, U.S. Operations
|
|
|
|
|
(2006-2018), Federal Express Corporation, a subsidiary of FedEx; formerly,
|
|
|
|
|
Member of the Board of Directors (2012-2018), Safe Kids Worldwide® (a
|
|
|
|
|
non-profit organization dedicated to preventing childhood injuries).
|
|
|
|
|
Member of the Board of Directors (since 2014), The Sherwin-Williams
|
|
|
|
|
Company (develops, manufactures, distributes and sells paints, coatings
|
|
|
|
|
and related products); Director (since 2020), Crown Castle International
|
|
|
|
|
(provider of communications infrastructure)
|
|
|
■ MARGARET L. WOLFF
|
|
|
Formerly, member of the Board of Directors (2013-2017) of Travelers
|
|
1955
|
|
|
Insurance Company of Canada and The Dominion of Canada General
|
|
333 W. Wacker Drive
|
Board Member
|
2016
|
Insurance Company (each, a part of Travelers Canada, the Canadian
|
142
|
Chicago, IL 6o6o6
|
|
Class I
|
operation of The Travelers Companies, Inc.); formerly, Of Counsel,
|
|
|
|
|
Skadden, Arps, Slate, Meagher & Flom LLP (legal services, Mergers &
|
|
|
|
|
Acquisitions Group) (2005-2014); Member of the Board of Trustees of
|
|
|
|
|
New York-Presbyterian Hospital (since 2005); Member (since 2004) and
|
|
|
|
|
Chair (since 2015) of the Board of Trustees of The John A. Hartford
|
|
|
|
|
Foundation (philanthropy dedicated to improving the care of older adults);
|
|
|
|
|
formerly, Member (2005-2015) and Vice Chair (2011-2015) of the Board of
|
|
|
|
|
Trustees of Mt. Holyoke College.
|
|
|
■ ROBERT L. YOUNG
|
|
|
Formerly, Chief Operating Officer and Director, J.P.Morgan Investment
|
|
1963
|
|
|
Management Inc. (financial services) (2010-2016); formerly, President
|
|
333 W. Wacker Drive
|
Board Member
|
2017
|
and Principal Executive Officer (2013-2016), and Senior Vice President
|
142
|
Chicago, IL 6o6o6
|
|
Class II
|
and Chief Operating Officer (2005-2010), of J.P.Morgan Funds; formerly,
|
|
|
|
|
Director and various officer positions for J.P.Morgan Investment
|
|
|
|
|
Management Inc. (formerly, JPMorgan Funds Management, Inc. and
|
|
|
|
|
formerly, One Group Administrative Services) and JPMorgan Distribution
|
|
|
|
|
Services, Inc. (financial services) (formerly, One Group Dealer Services,
|
|
|
|
|
Inc.) (1999-2017).
|
|
99
Board Members & Officers (Unaudited) (continued)
|
|
|
|
Name,
|
Position(s) Held
|
Year First
|
Principal
|
Year of Birth
|
with the Funds
|
Elected or
|
Occupation(s)
|
& Address
|
|
Appointed(2)
|
During Past 5 Years
|
|
Officers of the Funds:
|
|
|
|
|
■ DAVID J. LAMB
|
|
|
Managing Director of Nuveen Fund Advisors, LLC and Nuveen Securities, LLC (since 2020);
|
1963
|
Chief
|
|
Managing Director (since 2017), formerly, Senior Vice President of Nuveen, LLC (since 2006),
|
333 W. Wacker Drive
|
Administrative
|
2015
|
Vice President prior to 2006
|
Chicago, IL 6o6o6
|
Officer
|
|
|
|
■ MARK J. CZARNIECKI
|
|
|
Vice President and Assistant Secretary of Nuveen Securities, LLC (since 2016) and Nuveen Fund
|
1979
|
Vice President
|
|
Advisors (since 2017); Vice President and Associate General Counsel of Nuveen, LLC (since 2013)
|
901 Marquette Avenue
|
and Assistant
|
2013
|
and Vice President, Assistant Secretary and Associate General Counsel of Nuveen Asset
|
Minneapolis, MN 55402
|
Secretary
|
|
Management (since 2018).
|
|
■ DIANA R. GONZALEZ
|
|
|
Vice President and Assistant Secretary of Nuveen Fund Advisors, LLC (since 2017); Vice President
|
1978
|
Vice President
|
|
and Associate General Counsel of Nuveen, LLC (since 2017); Associate General Counsel of Jackson
|
333 W. Wacker Drive
|
and Assistant
|
2017
|
National Asset Management, LLC (2012-2017).
|
Chicago, IL 6o6o6
|
Secretary
|
|
|
|
■ NATHANIEL T. JONES
|
|
|
Managing Director (since 2017), formerly, Senior Vice President (2016-2017), formerly,
|
1979
|
|
|
Vice President (2011-2016) of Nuveen, LLC; Managing Director (since 2015) of Nuveen Fund
|
333 W. Wacker Drive
|
Vice President
|
2016
|
Advisors, LLC; Chartered Financial Analyst.
|
Chicago, IL 6o6o6
|
and Treasurer
|
|
|
|
■ TINA M. LAZAR
|
|
|
Managing Director (since 2017), formerly, Senior Vice President (2014-2017) of
|
1961
|
|
|
Nuveen Securities, LLC.
|
333 W. Wacker Drive
|
Vice President
|
2002
|
|
Chicago, IL 6o6o6
|
|
|
|
|
■ BRIAN J. LOCKHART
|
|
|
Managing Director (since 2019) of Nuveen Fund Advisors, LLC; Managing Director (since 2017),
|
1974
|
|
|
formerly, Vice President (2010-2017) of Nuveen, LLC; Head of Investment Oversight (since 2017),
|
333 W. Wacker Drive
|
Vice President
|
2019
|
formerly, Team Leader of Manager Oversight (2015-2017); Chartered Financial Analyst and Certified
|
Chicago, IL 6o6o6
|
|
|
Financial Risk Manager.
|
|
■ JACQUES M. LONGERSTAEY
|
|
Senior Managing Director, Chief Risk Officer, Nuveen, LLC (since May 2019); Senior Managing
|
1963
|
|
|
Director (since May 2019) of Nuveen Fund Advisors, LLC; formerly, Chief Investment and Model
|
8500 Andrew
Carnegie Blvd.
|
Vice President
|
2019
|
Risk Officer, Wealth & Investment Management Division, Wells Fargo Bank (NA) (2013-2019).
|
Charlotte, NC 28262
|
|
|
|
|
■ KEVIN J. MCCARTHY
|
|
|
Senior Managing Director (since 2017) and Secretary and General Counsel (since 2016) of Nuveen
|
1966
|
Vice President
|
|
Investments, Inc., formerly, Executive Vice President (2016-2017) and Managing Director and
|
333 W. Wacker Drive
|
and Assistant
|
2007
|
Assistant Secretary (2008-2016); Senior Managing Director (since 2017) and Assistant Secretary
|
Chicago, IL 6o6o6
|
Secretary
|
|
(since 2008) of Nuveen Securities, LLC, formerly Executive Vice President (2016-2017) and
|
|
|
|
Managing Director (2008-2016); Senior Managing Director (since 2017), and Secretary (since 2016)
|
|
|
|
of Nuveen Fund Advisors, LLC, formerly, Co-General Counsel (2011-2020), Executive Vice President
|
|
|
|
(2016-2017), Managing Director (2008-2016) and Assistant Secretary (2007-2016); Senior
|
|
|
|
Managing Director (since 2017), Secretary (since 2016) of Nuveen Asset Management, LLC,
|
|
|
|
formerly, Associate General Counsel (2011-2020), Executive Vice President (2016-2017) and
|
|
|
|
Managing Director and Assistant Secretary (2011- 2016); Vice President (since 2007) and Secretary
|
|
|
|
(since 2016), formerly, Assistant Secretary, of NWQ Investment Management Company, LLC, Santa
|
|
|
|
Barbara Asset Management, LLC and Winslow Capital Management, LLC (since 2010). Senior
|
|
|
|
Managing Director (since 2017) and Secretary (since 2016) of Nuveen Alternative Investments, LLC.
|
100
|
|
|
|
Name,
|
Position(s) Held
|
Year First
|
Principal
|
Year of Birth
|
with the Funds
|
Elected or
|
Occupation(s)
|
& Address
|
|
Appointed(2)
|
During Past 5 Years
|
|
|
|
Officers of the Funds (continued)
|
|
|
|
|
■ JON SCOTT MEISSNER
|
|
|
Managing Director of Mutual Fund Tax and Financial Reporting groups at Nuveen (since 2017);
|
1973
|
Vice President
|
|
Managing Director of Nuveen Fund Advisors, LLC (since 2019); Senior Director of Teachers
|
8500 Andrew Carnegie Blvd.
|
and Assistant
|
2019
|
Advisors, LLC and TIAA-CREF Investment Management, LLC (since 2016); Senior Director
|
Charlotte, NC 28262
|
Secretary
|
|
(since 2015) Mutual Fund Taxation to the TIAA-CREF Funds, the TIAA-CREF Life Funds, the TIAA
|
|
|
|
Separate Account VA-1 and the CREF Accounts; has held various positions with TIAA since 2004.
|
|
■ DEANN D. MORGAN
|
|
|
President, Nuveen Fund Advisors, LLC (since 2020); Executive Vice President, Global Head of
|
1969
|
|
|
Product at Nuveen, LLC (since 2019); Co-Chief Executive Officer of Nuveen Securities, LLC
|
730 Third Avenue
|
Vice President
|
2020
|
since 2020); Managing Member of MDR Collaboratory LLC (since 2018); Managing Director,
|
New York, NY 10017
|
|
|
(Head of Wealth Management Product Structuring & COO Multi Asset Investing. The Blackstone
|
|
|
|
Group (2013-2017)
|
|
■ CHRISTOPHER M. ROHRBACHER
|
|
Managing Director (since 2017) and Assistant Secretary of Nuveen Securities, LLC; Managing
|
1971
|
Vice President
|
|
Director (since 2017) General Counsel (since 2020), and Assistant Secretary (since 2016),
|
333 W. Wacker Drive
|
and Assistant
|
2008
|
formerly, Senior Vice President (2016-2017), of Nuveen Fund Advisors, LLC; Managing
|
Chicago, IL 6o6o6
|
Secretary
|
|
Director, Associate General Counsel and Assistant Secretary of Nuveen Asset Management,
|
|
|
|
LLC (since 2020); Managing Director (since 2017), and Associate General Counsel (since 2016),
|
|
|
|
formerly, Senior Vice President (2012-2017) and Assistant General Counsel (2008-2016) of
|
|
|
|
Nuveen, LLC.
|
|
■ WILLIAM A. SIFFERMANN
|
|
|
Managing Director (since 2017), formerly Senior Vice President (2016-2017) and Vice President
|
1975
|
|
|
(2011-2016) of Nuveen, LLC.
|
333 W. Wacker Drive
|
Vice President
|
2017
|
|
Chicago, IL 6o6o6
|
|
|
|
|
■ E. SCOTT WICKERHAM
|
|
|
Senior Managing Director, Head of Fund Administration at Nuveen, LLC (since 2019),
|
1973
|
Vice President
|
|
formerly, Managing Director; Senior Managing Director (since 2019) of Nuveen Fund Advisers,
|
8500 Andrew Carnegie Blvd.
|
and Controller
|
2019
|
(LLC; Principal Financial Officer, Principal Accounting Officer and Treasurer (since 2017) of the
|
Charlotte, NC 28262
|
|
|
TIAA-CREF Funds, the TIAA-CREF Life Funds, the TIAA Separate Account VA-1 and Principal
|
|
|
|
Financial Officer, Principal Accounting Officer (since 2020) and Treasurer (since 2017) to the CREF
|
|
|
|
Accounts; formerly, Senior Director, TIAA-CREF Fund Administration (2014-2015); has held various
|
|
|
|
positions with TIAA since 2006.
|
|
■ MARK L. WINGET
|
|
|
Vice President and Assistant Secretary of Nuveen Securities, LLC (since 2008), and Nuveen
|
1968
|
Vice President
|
|
Fund Advisors, LLC (since 2019); Vice President, Associate General Counsel and Assistant
|
333 W. Wacker Drive
|
and Secretary
|
2008
|
Secretary of Nuveen Asset Management, LLC (since 2020); Vice President (since 2010) and
|
Chicago, IL 60606
|
|
|
Associate General Counsel (since 2019), formerly, Assistant General Counsel (2008-2016) of
|
|
|
|
Nuveen, LLC.
|
101
Board Members & Officers (Unaudited) (continued)
|
|
|
|
Name,
|
Position(s) Held
|
Year First
|
Principal
|
Year of Birth
|
with the Funds
|
Elected or
|
Occupation(s)
|
& Address
|
|
Appointed(2)
|
During Past 5 Years
|
|
|
|
Officers of the Funds (continued)
|
|
|
|
|
■ GIFFORD R. ZIMMERMAN
|
|
|
Formerly: Managing Director (2002-2020) and Assistant Secretary (2002-2020) of Nuveen
|
1956
|
Vice President
|
|
Securities, LLC; formerly, Managing Director (2002-2020), Assistant Secretary (1997-2020) and
|
333 W. Wacker Drive
|
and Chief
|
1988
|
Co-General Counsel (2011- 2020) of Nuveen Fund Advisors, LLC; formerly, Managing Director
|
Chicago, IL 60606
|
Compliance Officer
|
|
(2004-2020) and Assistant Secretary (1994-2020) of Nuveen Investments, Inc.; formerly,
|
|
|
|
Managing Director, Assistant Secretary and Associate General Counsel of Nuveen Asset
|
|
|
|
Management, LLC (2011-2020); formerly, Vice President and Assistant Secretary of NWQ
|
|
|
|
Investment Management Company, LLC (2002-2020), Santa Barbara Asset Management, LLC
|
|
|
|
(2006-2020) and Winslow Capital Management, LLC (2010-2020); Chartered Financial Analyst.
|
(1) The Board of Trustees is divided into three classes, Class I, Class II, and Class III, with each being elected to serve until the third succeeding annual
shareholders’ meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed, except two board members are elected by the holders of Preferred Shares, when applicable, to serve until the
next annual shareholders’ meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed. The year first elected or appointed represents the year in which the board member was first
elected or appointed to any fund in the Nuveen complex.
(2) Officers serve indefinite terms until their successor has been duly elected and qualified, their death or their resignation or removal. The year first
elected or appointed represents the year in which the Officer was first elected or appointed to any fund in the Nuveen complex.
102
Notes
103