JPC - JPC: Attractive Dividend Of 8.2% With High Skew To Upside Scenario

2024-04-15 06:44:02 ET

Summary

• Nuveen Preferred & Income Opportunities Fund is an actively managed CEF focused on securities ranking below junior debt but above equity.
• JPC utilizes external leverage to amplify yield, with leverage accounting for about 38% of total assets under management.
• The portfolio of JPC is de-risked through strong diversification and focus on investment-grade securities.
• Considering the underlying structure and the already reflected effects of the external leverage component, JPC carries greater upside potential than it is exposed to the downside scenario.
• In this article, I elaborate in detail why I have decided to allocate a small portion of my capital into JPC.

Nuveen Preferred & Income Opportunities Fund ( JPC ) is an actively managed CEF with a focus on securities, which rank below the junior debt but above equity. Approximately, 80% of the total AuM is placed in the preferred shares and other income producing instruments such as hybrid bonds and contingent capital securities. The remaining 20% is distributed among other more opportunistic securities - primarily corporate and taxable municipal debt (and to a lesser degree, common equity)....

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