Closed End Fund #1: Nuveen Dividend Advantage Municipal Fund
Distribution Rate: 6.8%
Expense Ratio: 1.93%
The first closed end fund for investors to consider is the Nuveen Dividend Advantage Municipal Fund (NAD). This closed end fund focuses on a diversified portfolio of tax-advantaged municipal bonds issued by U.S. state and local government entities.
NAD is managed by Nuveen’s munibond expert, Thomas C. Spalding Jr., CFA. He has been with Nuveen for almost four decades and started Nuveen’s first closed end fund in 1987.
This particular municipal closed end fund is currently trading at a discount of nearly 10%. It also has a solid current distribution rate of 6.8%, along with leverage of 37%. Including interest expense from that leverage, the total expense ratio is 1.9% for common shares.
This closed end fund is down 12% year-to-date, but those who keep an eye on historical performance of managers should note its five-year return north of 10%.