CEO Certification Disclosure
The 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. The 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
The 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,
the 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.
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NIM
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Common shares repurchased
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0
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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.
46
Glossary of Terms Used in this Report (Unaudited)
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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.
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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.
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S&P Municipal
Bond Intermediate Index: An unleveraged, market value-weighted index containing all of the bonds in the S&P Municipal Bond
Index with maturity dates between 3 and 14.999 years. Index returns assume reinvestment of distributions, but do not reflect any applicable
sales charges or management fees.
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47
Annual Investment Management Agreement Approval Process (Unaudited)
At a meeting held on May 25-27, 2021 (the “May Meeting”),
the Board of Trustees (the “Board” and each Trustee, a “Board Member”) of the Fund,
which is comprised entirely of Board Members who are not “interested persons” (as defined under the Investment Company Act
of 1940 (the “1940 Act”)) (the “Independent Board Members”), approved the renewal of the
management agreement (the “Investment Management Agreement”) with Nuveen Fund Advisors, LLC (the “Adviser”)
pursuant to which the Adviser serves as the investment adviser to the Fund and the sub-advisory agreement (the “Sub-Advisory
Agreement”) with Nuveen Asset Management, LLC (the “Sub-Adviser”) pursuant to which the Sub-Adviser
serves as the sub-adviser to the Fund. Although the 1940 Act requires that continuances of the Advisory Agreements (as defined below)
be approved by the in-person vote of a majority of the Independent Board Members, the May Meeting was 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 was held virtually in reliance on certain exemptive relief the Securities and Exchange Commission provided
to registered investment companies providing temporary relief from the in-person voting requirements of the 1940 Act with respect to the
approval of a fund’s advisory agreement in light of these challenges.
Following up to an initial two-year period, the Board considers
the renewal of the Investment Management Agreement and Sub-Advisory Agreement on an annual basis. The Investment Management Agreement
and Sub-Advisory Agreement are collectively referred to as the “Advisory Agreements” and the Adviser and
the Sub-Adviser are collectively, the “Fund Advisers” and each, a “Fund Adviser.” Throughout
the year, the Board and its committees meet regularly and, at these meetings, receive regular and/or special reports that cover an extensive
array of topics and information that are relevant to its annual consideration of the renewal of the advisory agreements for the Nuveen
funds. Such information may address, among other things, fund performance and risk information; the Adviser’s strategic plans; product
initiatives for various funds; the review of the funds and investment teams; compliance, regulatory and risk management matters; the trading
practices of the various sub-advisers to the funds; valuation of securities; fund expenses; securities lending; liquidity management;
overall market and regulatory developments; and with respect to closed-end funds, capital management initiatives, institutional ownership,
management of leverage financing and the secondary market trading of the closed-end funds and any actions to address discounts. The Board
also seeks to meet periodically with the Nuveen funds’ sub-advisers and portfolio teams, when feasible.
In addition, in connection with the annual consideration of the
advisory agreements for the Nuveen funds, the Board, through its independent legal counsel, requested and received extensive materials
and information prepared specifically for its annual consideration of the renewal of such advisory agreements by the Adviser and by Broadridge
Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data. The materials cover a
wide range of topics including, but not limited to, a description of the nature, extent and quality of services provided by the Fund Advisers;
a review of product actions taken during 2020 (such as mergers, liquidations, fund launches, changes to investment teams, and changes
to investment policies); a review of each sub-adviser to the Nuveen funds and the applicable investment teams; an analysis of fund performance
in absolute terms and as compared to the performance of certain peer funds and benchmarks with a focus on any performance outliers; an
analysis of the fees and expense ratios of the Nuveen funds in absolute terms and as compared to those of certain peer funds with a focus
on any expense outliers; a review of management fee schedules; a description of portfolio manager compensation; an overview of the secondary
market trading of shares of the Nuveen closed-end funds (including, among other things, an analysis of performance, distribution and valuation
and capital-raising trends in the broader closed-end fund market and with respect to Nuveen closed-end funds and a review of the leverage
management actions taken on behalf of the closed-end funds particularly during the periods of market volatility generally caused by the
COVID-19 pandemic); a review of the performance of various service providers; a description of various initiatives Nuveen had undertaken
or continued during the year for the benefit of particular fund(s) and/or the
48
complex; a description of the profitability or financial data of
Nuveen and the sub-advisers to the Nuveen funds; and a description of indirect benefits received by the Adviser and the sub-advisers as
a result of their relationships with the Nuveen funds. The information prepared specifically for the annual review supplemented the information
provided to the Board and its committees and the evaluations of the Nuveen funds by the Board and its committees during the year.
In continuing its practice, the Board met prior to the May Meeting
to begin its considerations of the renewal of the Advisory Agreements. Accordingly, on April 21-22, 2021 (the “April Meeting”),
the Board met to review and discuss, in part, the performance of the Nuveen funds and the Adviser’s evaluation of each sub-adviser
to the Nuveen funds. At the April Meeting, the Board Members asked questions and requested additional information that was provided for
the May Meeting. The Board reviewed fund performance throughout the year and in its review, the Board recognized the volatile market conditions
that occurred in early 2020 arising, in part, from the public health crisis caused by the novel coronavirus known as COVID-19 and the
resulting impact on a fund’s performance for 2020 and thereafter. Accordingly, the Board considered performance data measured over
various periods of time as summarized in more detail below.
The Independent Board Members considered the review of the advisory
agreements for the Nuveen funds to be an ongoing process and employed the accumulated information, knowledge and experience the Board
Members had gained during their tenure on the boards governing the Nuveen funds and working with the Adviser and sub-advisers in their
review of the advisory agreements. The contractual arrangements are a result of multiple years of review, negotiation and information
provided in connection with the boards’ annual review of the Nuveen funds’ advisory arrangements and oversight of the Nuveen
funds.
The Independent Board Members were advised by independent legal
counsel during the annual review process as well as throughout the year, including meeting in executive sessions with such counsel at
which no representatives from the Adviser or the Sub-Adviser were present. In connection with their annual review, the Independent Board
Members also received a memorandum from independent legal counsel outlining their fiduciary duties and legal standards in reviewing the
Advisory Agreements.
The Board’s decision to renew the Advisory Agreements was
not based on a single identified factor, but rather the decision reflected the comprehensive consideration of all the information provided
throughout the year and at the April and May Meetings, and each Board Member may have attributed different levels of importance to the
various factors and information considered in connection with the approval process. The following summarizes the principal factors and
information, but not all the factors, the Board considered in deciding to renew the Advisory Agreements as well as the Board’s conclusions.
A. Nature, Extent and Quality of Services
In evaluating the renewal of the Advisory Agreements, the Independent
Board Members received and considered information regarding the nature, extent and quality of the applicable Fund Adviser’s services
provided to the Fund with particular focus on the services and enhancements to such services provided during the last year. The Independent
Board Members considered the Investment Management Agreement and the Sub-Advisory Agreement separately in the course of their review.
With this approach, they considered the respective roles of the Adviser and the Sub-Adviser in providing services to the Fund.
The Board recognized that the Nuveen funds operate in a highly
regulated industry and, therefore, the Adviser has provided a wide array of management, oversight and administrative services to manage
and operate the funds, and the scope and complexity of these services have expanded over time as a result of, among other things, regulatory
and other developments. The Board accordingly considered the extensive resources, tools and capabilities available to the Adviser to operate
and manage the Nuveen funds. With respect to the Adviser, as a general matter, some of these services it and its affiliates provide to
the Nuveen funds include, but are not limited to: product management (such as setting dividends, analyzing fund expenses, providing competitive
analysis, and providing due diligence support); investment oversight, risk management and securities valuation services (such as overseeing
and reviewing the various sub-advisers to the Nuveen funds and their investment teams; analyzing fund performance and risk data; overseeing
operational and risk management; participating in financial statement,
49
Annual Investment Management Agreement Approval Process (Unaudited)
(continued)
marketing and risk disclosures; providing daily valuation services
and developing related valuation policies, procedures and methodologies; periodic testing of audit and regulatory requirements; participating
in product development and management processes; participating in leverage management, liquidity monitoring and counterparty credit oversight;
providing due diligence and overseeing fund accounting and custody providers; overseeing third party pricing services and periodically
assessing investment and liquidity risks); fund administration (such as preparing fund tax returns and other tax compliance services;
preparing regulatory filings; overseeing the funds’ independent public accountants and other service providers; analyzing products
and enhancements; and managing fund budgets and expenses); oversight of shareholder services and transfer agency functions (such as overseeing
transfer agent service providers which include registered shareholder customer service and transaction processing; overseeing proxy solicitation
and tabulation services; and overseeing the production and distribution of financial reports by service providers); Board relations services
(such as organizing and administering Board and committee meetings, preparing various reports to the Board and committees and providing
other support services); compliance and regulatory oversight services (such as managing compliance policies; monitoring compliance with
applicable fund policies and laws and regulations; devising internal compliance programs and a framework to review and assess compliance
programs; evaluating the compliance programs of the various sub-advisers to the Nuveen funds and certain other service providers; responding
to regulatory requests; and preparing compliance training materials); legal support and oversight of outside law firms (such as helping
to prepare and file registration statements and proxy statements; overseeing fund activities and providing legal interpretations regarding
such activities; maintaining regulatory registrations and negotiating agreements with other fund service providers; and monitoring changes
in regulatory requirements and commenting on rule proposals impacting investment companies); and with respect to closed-end funds, managing
leverage, monitoring asset coverage and promoting an orderly secondary market.
In evaluating services, the Board reviewed various highlights of
the initiatives the Adviser and its affiliates have undertaken or continued in 2020 to benefit the Nuveen complex and/or particular Nuveen
funds and meet the requirements of an increasingly complex regulatory environment including, but not limited to:
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Centralization of Functions – ongoing initiatives to centralize investment
leadership, market approach and shared support functions within Nuveen and its affiliates in seeking to operate more effectively the
business and enhance the services to the Nuveen funds;
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Fund Improvements and Product Management Initiatives – continuing to proactively
manage the Nuveen fund complex as a whole and at the individual fund level with an aim to continually improve product platforms and investment
strategies to better serve shareholders through, among other things, rationalizing the product line and gaining efficiencies through
mergers, repositionings and liquidations; launching new funds; reviewing and updating investment policies and benchmarks; and modifying
portfolio management teams for various funds;
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Investment Team Integrations – continuing to integrate and adjust the members
of certain investment teams, in part, to allow greater access to tools and resources within the Nuveen organization and its affiliates;
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Capital Initiatives – continuing to invest capital to support new Nuveen
funds with initial capital as well as to support existing funds and facilitate regulatory or logistical changes;
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Compliance Program Initiatives – continuing efforts to mitigate compliance
risk, increase operating efficiencies, implement enhancements to strengthen key compliance program elements and support international
business growth and other corporate objectives;
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Investment Oversight – preparing reports to the Board addressing, among
other things, fund performance; market conditions; investment teams; new products; changes to mandates, policies and benchmarks; and
other management proposals;
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50
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Risk Management and Valuation Services - continuing to oversee and manage risk
including, among other things, conducting daily calculations and monitoring of risk measures across the Nuveen funds, instituting appropriate
investment risk controls, providing risk reporting throughout the firm, participating in internal oversight committees, and continuing
to implement an operational risk framework that seeks to provide greater transparency of operational risk matters across the complex
as well as provide multiple other risk programs that seek to provide a more disciplined and consistent approach to identifying and mitigating
Nuveen’s operational risks. Further, the securities valuation team continues, among other things, to oversee the daily valuation
process of the portfolio securities of the funds, maintains the valuation policies and procedures, facilitates valuation committee meetings,
manages relationships with pricing vendors, and prepares relevant valuation reports and designs methods to simplify and enhance valuation
workflow within the organization;
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Regulatory Matters – continuing efforts to monitor regulatory trends and
advocate on behalf of Nuveen and/or the Nuveen funds, to implement and comply with new or revised rules and mandates and to respond to
regulatory inquiries and exams;
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Government Relations – continuing efforts of various Nuveen teams and Nuveen’s
affiliates to develop policy positions on a broad range of issues that may impact the Nuveen funds, advocate and communicate these positions
to lawmakers and other regulatory authorities and work with trade associations to ensure these positions are represented;
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Business Continuity, Disaster Recovery and Information Security – continuing
efforts of Nuveen to periodically test and update business continuity and disaster recovery plans and, together with its affiliates,
to maintain an information security program designed to identify and manage information security risks, and provide reports to the Board,
at least annually, addressing, among other things, management’s security risk assessment, cyber risk profile, potential impact
of new or revised laws and regulations, incident tracking and other relevant information technology risk-related reports;
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Dividend Management Services – continuing to manage the dividends among
the varying types of Nuveen funds within the Nuveen complex to be consistent with the respective fund’s product design and positioning
in striving to deliver those earnings to shareholders in a relatively consistent manner over time as well as assisting in the development
of new products or the restructuring of existing funds; and
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with respect specifically to closed-end funds, such continuing services also included:
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Leverage Management Services – continuing to actively manage
the various forms of leverage utilized across the complex, including through committing resources and focusing on sourcing/structure
development and bank provider management, which was key to navigating the respective funds through the COVID-related market volatility
in 2020;
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Capital Management, Market Intelligence and Secondary Market Services –
ongoing capital management efforts through shelf offerings, share repurchases, tender offers and capital return programs as well as providing
market data analysis to help understand closed-end fund ownership cycles and their impact on secondary market trading as well as to improve
proxy solicitation efforts; and
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Closed-end
Fund Investor Relations Program – maintaining the closed-end fund investor relations program which, among other things,
raises awareness, provides educational materials and cultivates advocacy for closed-end funds and the Nuveen closed-end fund product
line.
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In its review, the Board recognized that Nuveen’s risk management,
compliance, technology and operations capabilities are all integral to providing its investment management services to the Nuveen funds.
Further, the Board noted the benefits to shareholders of investing in a Nuveen fund, as each Nuveen fund is a part of a large fund complex
with a variety of investment disciplines, capabilities, expertise and resources available to navigate and support the funds including
during stressed times as occurred in the market in the first half of 2020. The Board recognized the impact of the COVID-19 pandemic during
the year and the adaptations required by service providers to continue to deliver their services to the Nuveen funds, including working
remotely. In this regard, the Board noted the ability of the Adviser and the various sub-advisers to the Nuveen funds to provide
51
Annual Investment Management Agreement Approval Process (Unaudited)
(continued)
continuously their services notwithstanding the significant disruptions
caused by the pandemic. In addition to the services provided by the Adviser, the Board also considered the risks borne by the Adviser
and its affiliates in managing the Nuveen funds, including entrepreneurial, operational, reputational, regulatory and litigation risks.
The Board further considered the division of responsibilities between
the Adviser and the Sub-Adviser and recognized that the Sub-Adviser and its investment personnel generally are responsible for the management
of the Fund’s portfolio under the oversight of the Adviser and the Board. The Board considered an analysis of the Sub-Adviser provided
by the Adviser which included, among other things, the assets under management of the applicable investment team and changes thereto,
a summary of the applicable investment team and changes thereto, the investment process and philosophy of the applicable investment team,
the performance of the Nuveen funds sub-advised by the Sub-Adviser over various periods of time and a summary of any significant policy
and/or other changes to the Nuveen funds sub-advised by the Sub-Adviser. The Board further considered at the May Meeting or prior meetings
evaluations of the Sub-Adviser’s compliance programs and trade execution. The Board also considered the structure of investment
personnel compensation programs and whether this structure provides appropriate incentives to act in the best interests of the respective
Nuveen funds. The Board noted that the Adviser recommended the renewal of the Sub-Advisory Agreement.
Based on its review, the Board determined, in the exercise of its
reasonable business judgment, that it was satisfied with the nature, extent and quality of services provided to the Fund under each Advisory
Agreement.
B. The Investment Performance of the Fund and Fund Advisers
In evaluating the quality of the services provided by the Fund
Advisers, the Board also received and considered a variety of investment performance data of the Nuveen funds they advise. In evaluating
performance, the Board recognized that performance data may differ significantly depending on the ending date selected, particularly during
periods of market volatility, and therefore considered performance over a variety of time periods that may include full market cycles.
In this regard, the Board reviewed, among other things, Fund performance over the quarter, one-, three- and five-year periods ending December
31, 2020 as well as performance data periods ending nearer to the May Meeting, including the quarter, one-, three- and five-year periods
ending March 31, 2021 and May 14, 2021. The performance data prepared for the annual review of the advisory agreements for the Nuveen
funds supplemented the fund performance data that the Board received throughout the year at its meetings representing differing time periods.
In its review, the Board took into account the discussions with representatives of the Adviser; the Adviser’s analysis regarding
fund performance that occurred at these Board meetings with particular focus on funds that were considered performance outliers (both
overperformance and underperformance); the factors contributing to the performance; and any recommendations or steps taken to address
performance concerns. Regardless of the time period reviewed by the Board, the Board recognized that shareholders may evaluate performance
based on their own holding periods which may differ from the periods reviewed by the Board and lead to differing results.
In its review, the Board reviewed both absolute and relative fund
performance during the annual review over the various time periods. With respect to the latter, the Board considered fund performance
in comparison to the performance of peer funds (the “Performance Peer Group”) and recognized and/or customized
benchmarks (i.e., generally benchmarks derived from multiple recognized benchmarks). For Nuveen funds that had changes in
portfolio managers since 2018 or significant changes, among other things, to their investment strategies or policies since 2019, the Board
reviewed certain performance data comparing the performance of such funds before and after such changes. In considering performance data,
the Board is aware of certain inherent limitations with such data, including that differences between the objective(s), strategies and
other characteristics of the Nuveen funds compared to the respective Performance Peer Group and/or benchmark(s) (such as differences in
the use of leverage) as well as differences in the composition of the Performance Peer Group over time will necessarily contribute to
differences in performance results and limit the value of the comparative information. To assist the Board in its review of the
52
comparability of the relative performance, the Adviser has ranked
the relevancy of the peer group to the funds as low, medium or high.
The Board also evaluated performance in light of various relevant
factors, including, among other things, general market conditions, issuer-specific information, asset class information, leverage and
fund cash flows. In relation to general market conditions, the Board recognized the significant market decline in the early part of 2020
in connection with, among other things, the impact of the COVID-19 pandemic and that such a period of underperformance and market volatility
may significantly weigh on the longer term performance results. Accordingly, depending on the facts and circumstances including any differences
between the respective Nuveen fund and its benchmark and/or Performance Peer Group, the Board may be satisfied with a fund’s performance
notwithstanding that its performance may be below that of its benchmark or peer group for certain periods. However, with respect to any
Nuveen funds for which the Board had identified performance issues, the Board monitors such funds closely until performance improves,
discusses with the Adviser the reasons for such results, considers whether any steps are necessary or appropriate to address such issues,
and reviews the results of any steps undertaken.
The secondary market trading of shares of the Nuveen closed-end
funds continues to be a priority for the Board given its importance to shareholders, and therefore data reflecting the premiums and discounts
at which the shares of the closed-end funds trade are reviewed by the Board during its annual review and by the Board and/or its Closed-end
Fund committee during its respective quarterly meetings throughout the year. The Board continuously reviews all closed-end fund discounts
and the fund’s performance relative to both primary and secondary benchmarks and peers. In its review, the Board considers, among
other things, changes to investment mandates and guidelines, enhanced and attractive distribution policies, leverage levels and types,
fund reorganizations, share repurchases and similar capital market actions and effective communications programs to build greater awareness
and deepen understanding of closed-end funds.
The Board noted that although the Fund’s performance was
below the performance of its benchmark for the one- and three-year periods ended December 31, 2020, the Fund outperformed its benchmark
for the five-year period ended December 31, 2020 and ranked in the third quartile of its Performance Peer Group for the one-, three- and
five-year periods ended December 31, 2020. Although the Fund’s performance was below the performance of its benchmark for the three-year
period ended March 31, 2021, the Fund outperformed its benchmark for the one- and five-year periods ended March 31, 2021. The Fund also
ranked in the third quartile of its Performance Peer Group for the one-, three- and five-year periods ended March 31, 2021. For the periods
ended May 14, 2021, the Fund’s performance was below the performance of its benchmark for the three-year period but the Fund
outperformed its benchmark for the one- and five-year periods. The Fund also ranked in the fourth quartile of its Performance Peer Group
for the one- and five-year periods and third quartile for the three-year period ended May 14, 2021. In its review, the Board noted that
the Performance Peer Group was classified as low for relevancy. Based on its review, the Board was satisfied with the Fund’s overall
performance.
C. Fees, Expenses and Profitability
1. Fees and Expenses
As part of its annual review, the Board considered the contractual
management fee and net management fee (the management fee after taking into consideration fee waivers and/or expense reimbursements, if
any) paid by a Nuveen fund to the Adviser in light of the nature, extent and quality of the services provided. The Board also considered
the total operating expense ratio of each fund before and after any fee waivers and/or expense reimbursements. More specifically, the
Independent Board Members reviewed, among other things, each fund’s gross and net management fee rates (i.e., before
and after expense reimbursements and/or fee waivers, if any) and net total expense ratio in relation to those of a comparable universe
of funds (the “Peer Universe”) established by Broadridge (subject to certain exceptions). The Independent Board
Members reviewed the methodology Broadridge employed to establish its Peer Universe and recognized that differences between the applicable
fund and its respective Peer Universe as well as changes to the composition of the Peer Universe from year to year may limit some of the
53
Annual Investment Management Agreement Approval Process (Unaudited)
(continued)
value of the comparative data. The Independent Board Members also
considered a fund’s operating expense ratio as it more directly reflected the shareholder’s costs in investing in the respective
fund.
In their review, the Independent Board Members considered, in particular,
each fund with a net expense ratio (excluding investment-related costs of leverage) of six basis points or higher compared to that of
its peer average (each, an “Expense Outlier Fund”), including the Fund, and an analysis as to the factors contributing
to each such fund’s higher relative net expense ratio. In addition, although the Board reviewed a fund’s total net expenses
both including and excluding investment-related expenses (i.e., leverage costs) and taxes for certain of the closed-end funds,
the Board recognized that leverage expenses will vary across funds and in comparison to peers because of differences in the forms and
terms of leverage employed by the respective fund. Accordingly, in reviewing the comparative data between a fund and its peers, the Board
generally considered the fund’s net expense ratio and fees (excluding leverage costs and leveraged assets) to be higher if they
were over 10 basis points higher, slightly higher if they were 6 to 10 basis points higher, in line if they were within approximately
5 basis points higher than the peer average and below if they were below the peer average of the Peer Universe. The Independent Board
Members also considered, in relevant part, a fund’s net management fee and net total expense ratio in light of its performance history.
In their review of the fee arrangements for the Nuveen funds, the
Independent Board Members considered the management fee schedules, including the complex-wide and fund-level breakpoint schedules. The
Board noted that across the Nuveen fund complex, the complex-wide fee breakpoints reduced fees by approximately $58.4 million and fund-level
breakpoints reduced fees by approximately $69.6 million in 2020.
With respect to the Sub-Adviser, the Board also considered the
sub-advisory fee schedule paid to the Sub-Adviser in light of the sub-advisory services provided to the Fund, the breakpoint schedule
and comparative data of the fees the Sub-Adviser charges to other clients, if any. In its review, the Board recognized that the compensation
paid to the Sub-Adviser is the responsibility of the Adviser, not the Fund.
The Independent Board Members noted that the Fund had a net management
fee and a net expense ratio higher than the respective peer average. The Independent Board Members noted that the Fund’s net expense
ratio was higher than the average of the Peer Universe primarily due to the odd composition of the Peer Universe which contained only
one non-Nuveen fund. The Independent Board Members noted that the Fund’s net management fee and net expense ratio were below those
of the non-Nuveen peer. The Independent Board Members were satisfied with the explanation of the differential.
Based on its review of the information provided, the Board determined
that the Fund’s management fees (as applicable) to a Fund Adviser were reasonable in light of the nature, extent and quality of
services provided to the Fund.
2. Comparisons with the Fees of Other Clients
In determining the appropriateness of fees, the Board also considered
information regarding the fee rates the respective Fund Advisers charged to certain other types of clients and the type of services provided
to these other clients. With respect to the Adviser and/or the Sub-Adviser, such other clients may include retail and institutional managed
accounts, passively managed exchange-traded funds (“ETFs”) sub-advised by the Sub-Adviser that are offered by another
fund complex and municipal managed accounts offered by an unaffiliated adviser. With respect to the Sub-Adviser, the Board reviewed, among
other things, the fee range and average fee of municipal retail advisory accounts and municipal institutional accounts as well as the
sub-advisory fee the Sub-Adviser received for serving as sub-adviser to passive ETFs offered outside the Nuveen family.
In considering the fee data of other clients, the Board recognized,
among other things, the differences in the amount, type and level of services provided to the Nuveen funds relative to other clients as
well as the differences in portfolio investment policies, investor profiles, account sizes and regulatory requirements, all of which contribute
to the variations in the fee schedules. The Board recognized the breadth of services the Adviser had provided to the Nuveen funds compared
to the other types of clients as the funds operate in a highly regulated industry with increasing regulatory requirements as well as the
increased entrepreneurial, legal and regulatory risks that the Adviser incurs in sponsoring and managing the funds. Further, with respect
to
54
ETFs, the Board considered that Nuveen ETFs were passively managed
compared to the active management of the other Nuveen funds which contributed to the differences in fee levels between the Nuveen ETFs
and other Nuveen funds. In general, higher fee levels reflect higher levels of service provided by the Adviser, increased investment management
complexity, greater product management requirements, and higher levels of business risk or some combination of these factors. The Board
further considered that the Sub-Adviser’s fee is essentially for portfolio management services and therefore more comparable to
the fees it receives for retail wrap accounts and other external sub-advisory mandates. The Board concluded the varying levels of fees
were justified given, among other things, the inherent differences in the products and the level of services provided to the Nuveen funds
versus other clients, the differing regulatory requirements and legal liabilities and the entrepreneurial, legal and regulatory risks
incurred in sponsoring and advising a registered investment company.
3. Profitability of Fund Advisers
In their review, the Independent Board Members considered information
regarding Nuveen’s level of profitability for its advisory services to the Nuveen funds for the calendar years 2020 and 2019. The
Board reviewed, among other things, Nuveen’s net margins (pre-tax) (both including and excluding distribution expenses); gross and
net revenue margins (pre- and post-tax and excluding distribution) from Nuveen funds only; revenues, expenses and net income (pre- and
post-tax and before distribution expenses) of Nuveen for fund advisory services; and comparative profitability data comparing the operating
margins of Nuveen compared to the adjusted operating margins of certain peers that had publicly available data and with the most comparable
assets under management (based on asset size and asset composition) for each of the last two calendar years. In reviewing the peer comparison
data, the Independent Board Members noted that Nuveen Investments, Inc.’s operating margins were on the low range compared to the
total company adjusted operating margins of the peers. The Board also reviewed the revenues and expenses the Adviser derived from its
ETF product line for the 2019 and 2020 calendar years.
In reviewing the profitability data, the Independent Board Members
recognized the subjective nature of calculating profitability as the information is not audited and is dependent on cost allocation methodologies
to allocate corporate-wide expenses to the Nuveen complex and its affiliates and to further allocate such Nuveen complex expenses between
the Nuveen fund and non-fund businesses. Generally, fund-specific expenses are allocated to the Nuveen funds and partial fund-related
expenses and/or corporate overhead and shared costs (such as legal and compliance, accounting and finance, information technology and
human resources and office services) are partially attributed to the funds pursuant to cost allocation methodologies. The Independent
Board Members reviewed a description of the cost allocation methodologies employed to develop the financial information, a summary of
the history of changes to the methodology over the years from 2010 to 2020, and the net revenue margins derived from the Nuveen funds
(pre-tax and including and excluding distribution) and total company margins from Nuveen Investments, Inc. compared to the firm-wide adjusted
margins of the peers for each calendar year from 2010 to 2020. The Board had also appointed three Independent Board Members to serve as
the Board’s liaisons, with the assistance of independent counsel, to review the development of the profitability data and any proposed
changes to the cost allocation methodology prior to incorporating any such changes and to report to the full Board. The Board recognized
that other reasonable and valid allocation methodologies could be employed and could lead to significantly different results. The Independent
Board Members also considered the key drivers behind the revenue and expense changes that impacted Nuveen’s net margins between
2019 and 2020. The Board also noted the reinvestments Nuveen and/or its parent made into its business through, among other things, the
investment of seed capital in certain Nuveen funds and continued investments in enhancements to information technology, portfolio accounting
systems and the global trading platform.
In reviewing the comparative peer data noted above, the Board considered
that the operating margins of Nuveen Investments, Inc. were in the lower half of the peer group range; however, the Independent Board
Members also recognized the limitations of the comparative data given that peer data is not generally public and the calculation of profitability
is subjective and affected by numerous factors (such as types of funds a peer manages, its business mix, its cost of capital, the numerous
assumptions underlying the methodology used to allocate expenses and other factors) that can have a significant impact on the results.
55
Annual Investment Management Agreement Approval Process (Unaudited)
(continued)
Aside from Nuveen’s profitability, the Board recognized that
the Adviser is a subsidiary of Nuveen, LLC, the investment management arm of Teachers Insurance and Annuity Association of America (“TIAA”).
Accordingly, the Board also reviewed a balance sheet for TIAA reflecting its assets, liabilities and capital and contingency reserves
for the 2020 and 2019 calendar years to consider the financial strength of TIAA. The Board recognized the benefit of an investment adviser
and its parent with significant resources, particularly during periods of market volatility as experienced with the COVID-19 pandemic.
In addition to Nuveen, the Independent Board Members considered
the profitability of the Sub-Adviser from its relationships with the Nuveen funds. In this regard, the Independent Board Members reviewed,
among other things, the Sub-Adviser’s revenues, expenses and net revenue margins (pre- and post-tax) for its advisory activities
for the calendar year ended December 31, 2020 as well as its pre- and post-tax net revenue margins for 2020 compared to such margins
for 2019. The Independent Board Members also reviewed a profitability analysis reflecting the revenues, expenses and revenue margin (pre-and
post-tax) by asset type for the Sub-Adviser for the calendar year ending December 31, 2020 and the pre- and post-tax revenue margins from
2020 and 2019.
In evaluating the reasonableness of the compensation, the Independent
Board Members also considered any other ancillary benefits derived by the respective Fund Adviser from its relationship with the Nuveen
funds as discussed in further detail below.
Based on a consideration of all the information provided, the Board
noted that Nuveen’s and the Sub-Adviser’s level of profitability was acceptable and not unreasonable in light of the services
provided.
D. Economies of Scale and Whether Fee Levels Reflect These Economies
of Scale
The Board considered whether there have been economies of scale
with respect to the management of the Nuveen funds and whether these economies of scale have been appropriately shared with the funds.
The Board recognized that although economies of scale are difficult to measure and certain expenses may not decline with a rise in assets,
there are several methods to help share the benefits of economies of scale, including breakpoints in the management fee schedule, fee
waivers and/or expense limitations, the pricing of Nuveen funds at scale at inception and investments in Nuveen’s business which
can enhance the services provided to the funds for the fees paid. The Board noted that Nuveen generally has employed these various methods,
and the Board considered the extent to which the Nuveen funds will benefit from economies of scale as their assets grow. In this regard,
the Board noted that the management fee of the Adviser is generally comprised of a fund-level component and a complex-level component
each with its own breakpoint schedule, subject to certain exceptions. The Board reviewed the fund-level and complex-level fee schedules.
The Board considered that the fund-level breakpoint schedules are designed to share economies of scale with shareholders if the particular
fund grows, and the complex-level breakpoint schedule is designed to deliver the benefits of economies of scale to shareholders when the
eligible assets in the complex pass certain thresholds even if the assets of a particular fund are unchanged or have declined. With respect
to the Nuveen closed-end funds, the Independent Board Members noted that, although such funds may from time to time make additional share
offerings, the growth of their assets would occur primarily through the appreciation of such funds’ investment portfolios. Further,
in the calculation of the complex-level component, the Board noted that it had approved the acquisition of several Nuveen funds by similar
TIAA-CREF funds in 2019. However, to mitigate the loss of the assets of these Nuveen funds deemed eligible to be included in the calculation
of the complex-wide fee when these Nuveen funds left the complex upon acquisition, Nuveen agreed to credit approximately $604.5 million
to assets under management to the Nuveen complex in calculating the complex-wide component.
The Independent Board Members also recognized the Adviser’s
continued reinvestment in its business through various initiatives including maintaining a seed account available for investments into
Nuveen funds and investing in its internal infrastructure, information technology and other systems that will, among other things, consolidate
and enhance accounting systems, integrate technology platforms to support growth and efficient data processing, and further develop its
global trading platform to enhance the investment process for the investment teams.
56
Based on its review, the Board concluded that the current fee arrangements
together with the Adviser’s reinvestment in its business appropriately shared any economies of scale with shareholders.
E. Indirect Benefits
The Independent Board Members received and considered information
regarding other benefits the respective Fund Adviser or its affiliates may receive as a result of their relationship with the Nuveen funds.
The Board considered the compensation that an affiliate of the Adviser received for serving as co-manager in the initial public offerings
of new closed-end funds and for serving as an underwriter on shelf offerings of existing closed-end funds. In addition, the Independent
Board Members also noted that various sub-advisers (including the Sub-Adviser) may engage in soft dollar transactions pursuant to which
they may receive the benefit of research products and other services provided by broker-dealers executing portfolio transactions on behalf
of the applicable Nuveen funds. However, the Board noted that any benefits for the Sub-Adviser when transacting in fixed-income securities
may be more limited as such securities generally trade on a principal basis and therefore do not generate brokerage commissions.
Based on its review, the Board concluded that any indirect benefits
received by a Fund Adviser as a result of its relationship with the Fund were reasonable and within acceptable parameters.
F. Other Considerations
The Board Members did not identify any single factor discussed
previously as all-important or controlling. The Board Members, including the Independent Board Members, concluded that the terms of each
Advisory Agreement were fair and reasonable, that the respective Fund Adviser’s fees were reasonable in light of the services provided
to the Fund and that the Advisory Agreements be renewed.
57
Notes
58
Notes
59
Nuveen:
Serving Investors for Generations
Since 1898, financial professionals and their clients have relied on Nuveen
to provide dependable investment solutions through continued adherence to proven, long-term investing principles. Today, we offer a range
of high quality solutions designed to be integral components of a well-diversified core portfolio.
Focused on meeting investor needs.
Nuveen is the investment manager of TIAA. We have grown into one of the
world’s premier global asset managers, with specialist knowledge across all major asset classes and particular strength in solutions
that provide income for investors and that draw on our expertise in alternatives and responsible investing. Nuveen is driven not only
by the independent investment processes across the firm, but also the insights, risk management, analytics and other tools and resources
that a truly world-class platform provides. As a global asset manager, our mission is to work in partnership with our clients to create
solutions which help them secure their financial future.
Find out how we can help you.
To learn more about how the products and services of Nuveen may be able
to help you meet your financial goals, talk to your financial professional, or call us at (800) 257-8787. Please read the information
provided carefully before you invest. Investors should consider the investment objective and policies, risk considerations, charges and
expenses of any investment carefully. Where applicable, be sure to obtain a prospectus, which contains this and other relevant information.
To obtain a prospectus, please contact your securities representative or Nuveen, 333 W. Wacker Dr., Chicago, IL 60606. Please read the
prospectus carefully before you invest or send money.
Learn more about
Nuveen Funds at: www.nuveen.com/closed-end-funds
Nuveen Securities, LLC, member FINRA and SIPC | 333 West Wacker
Drive Chicago, IL 60606 | www.nuveen.com
ESA-A-0921D 1893980-INV-B-11/22