Nuveen changes investment policies for nine funds, recommends mergers

By Tali Rackner

Norfolk, Va., Feb. 5 – Nuveen Investments said the board of trustees of nine Nuveen closed-end funds has approved a change to the funds’ investment policies and plans to merge the funds, according to a press release.

The merger is in order to enhance the funds’ trading appeal and lower operating expenses by creating single, larger funds with distinct mandates.

The Nuveen Premier Municipal Income Fund, Inc., Nuveen Premium Income Municipal Fund, Inc., Nuveen Select Quality Municipal Fund, Inc. and Nuveen Investment Quality Municipal Fund, Inc. will be merged into the Nuveen Dividend Advantage Municipal Fund and will be renamed the Nuveen Enhanced Quality Municipal Fund.

The Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Premium Income Municipal Fund 2, Inc. and Nuveen Performance Plus Municipal Fund, Inc. will be merged into the Nuveen Dividend Advantage Municipal Income Fund and will be renamed the Nuveen Enhanced AMT-Free Municipal Quality Fund.

As result of the policy changes, each fund will reposition its portfolio to achieve and consistently maintain a higher allocation to municipal securities rated BBB and below to enhance the funds’ competitiveness and investor appeal and thereby improve the market price at which the common shares trade relative to net asset value.

“Effective immediately, each fund may, under its revised investment policy, invest up to 35 percent of its portfolio in municipal securities rated BBB and below. However, the funds each have agreements related to outstanding preferred shares. These agreements currently have covenants aligned with the funds’ prior investment policy. Consequently, the funds will not be able to immediately take full advantage of the enhanced flexibility of the new investment policy. Those agreements may be amended in the future,” Nuveen said in the release.

Nuveen Fund Advisors is the investment advisor. It is a subsidiary of Chicago-based Nuveen Investments.

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