No, of course not Brian. Commercial property is down and that is not their fault.
But how they handle the downturn and communicating with their share holders is within their control.
For example when the auctions on preferred securities began failing, I read about it in the newspaper. For a long time the fund management made no effort that I'm aware of to explain the situation to share holders. There was no reason they couldn't have sent a letter to their share holders discussing the problem.
Another example is the leverage situation. Prior to the last conference call, I don't recall seeing any statements or discussion of the funds degree of leverage. (Now they are posting it.)
A third example involves another fund I own, JTP. According to the data at Nuveen.com/ETF the earnings per share of JTP are higher than the distributed dividends per share. So one would assume that there was no danger of a dividend cut. Yet without explanation the fund cut the dividend on Tuesday. What gives?
Brian, I hope I didn't give you the impression that I was challenging what you wrote in your initial post. That wasn't my intent. I've been an investor in various Nuveen funds since about the mid-1970's and prior to this I had quite a bit of confidence in their skills. I'm currently down over $250,000 in my various Nuveen funds, the dividends keep getting cut, and there seems to be a lack of clear explantions from the company. I don't blame them for the market but I'd like to know what they are doing. To say I'm upset would be putting it mildly.
Brian, I think the reason people are selling is that they have lost confidence in the fund and in Nuveen's management of it. A lot of us bought in at a much higher price and we've seen a steep capital loss and continuous dividend cuts. That doesn't inspire confidence in the future of the fund.
Except for their one conference call and their opaque six month reports, management hasn't gone out of its way to keep the share holders informed.
I'm hanging on for the moment, but I've got steep losses. Despite sitting in on their last conference call and carefully studying their web site, I was blind sided by yesterday's dividend cut. I actually thought they had finally turned the corner. In the absence of meaningful guidance from management and with a history of losses and dividend cuts, I can certainly understand share holders selling out.
I think the problem is as follows: retail and hedge fund investors have bought closed end funds, canadian royalty trusts and MLP's on leverage, effectively doing a carry trade (pay x to borrow, earn y on dividend/distribution and pocket difference). The problem is that we must have hit margin call territory again in the mid 700's and margin calls = relentless forced selling.