NUO - NUO: Safe Distribution At A Discount

• Nuveen Ohio Quality Municipal Income Fund has produced a flat total return since I went Neutral on it in February.
• Dividend coverage has improved and discount to NAV has widened slightly. The fund’s undistributed net investment income has been getting less negative since May.
• Short-term rates have collapsed. Cost of leverage has decreased and could head lower.
• Benchmark muni bond yields have moved to about even with treasuries, compared to their negative spread in February.
• The fund’s distribution looks safe here.  The 9.8-year duration could be a headwind to capital gains if longer-term rates increase.

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