Nuveen Floating Rate Income Fund

JFR

Market cap $1.25B

JFR's floating-rate loan portfolio faces income pressure if the Fed cuts rates, making dividend sustainability uncertain. Recent portfolio shifts to more defensive sectors reduce risk, but NAV per share continues to decline, raising valuation concerns. Current share price offers little discount to NAV, and the management fee above 1% further limits upside potential.

Although the US stock market is the largest in the world, with a market capitalization of roughly $49 trillion, the US bond market is larger, clocking in at $51 trillion.

Although double-digit yields were normal during the 1980s, lower interest rates and a robust stock market have rendered yields of 10% or higher obscure.

JFR offers a high 12.2% yield, benefiting from the current elevated interest rate environment, making it attractive for income-focused investors. The fund is diversified across 384 positions, primarily in senior loans, but carries significant credit risk due to heavy exposure to below-investment-grade borrowers. JFR trades at a 5% discount-to-NAV, and while price appreciation is possible if rates fall, distributions may decrease in a lower-rate scenario.

We've got a rare “delayed reaction” income play on our hands right now. Thanks to the April stock-market plunge, we can now pick up 12%+ dividends at attractive discounts.

The Nuveen Floating Rate Income Fund is currently oversold due to market reactions, presenting a tactical 'Buy' opportunity with a potential +5% bounce. JFR's valuation has been impacted by tariff concerns, despite strong economic fundamentals and a stable NAV, leading to a -12% discount to NAV. The fund's yield is projected to adjust to around 10% due to anticipated Fed rate cuts, but defaults remain low and the economy robust.

NEW YORK--(BUSINESS WIRE)--Nuveen Floating Rate Income Fund (NYSE: JFR) (the “Fund”) today announced the preliminary results of its transferable rights offering (the “Offer”) which expired at 5:00 p.m., Eastern time, on February 19, 2025 (the “Expiration Date”). The Offer entitled the rights holders to subscribe for an aggregate of up to an additional 26,911,238 common shares of the Fund (“Common Shares”). The subscription price for the Common Shares to be issued was $8.20 per Common Share, whi.

U.S. senior floating rate loans offer unique protection against interest rate volatility along with high yield, making them a valuable diversifier in income-focused portfolios. Explore the benefits of senior loans and Nuveen's strategy and outlook with Nuveen Head of Senior Loans Scott Caraher. Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions including the Nuveen Floating Rate Income Fund.

We review the CEF market valuation and performance through the third week of January and highlight recent market action. CEFs had a strong week, driven by rallies in stocks and Treasuries, with higher-beta MLP and REIT sectors leading. Nuveen Floating Rate Income Fund's rights offering is discussed, emphasizing the importance of either selling or exercising the rights.

JFR announced a transferable rights offering, allowing existing shareholders to purchase new shares at a discount. This move will increase the fund's assets under management (AUM) and liquidity but may cause short-term price weakness. The fund remains heavily weighted towards leveraged loans (84% of holdings) with a low duration of 0.44 years and high leverage (38%).