Nuveen Select Tax-Free Income Portfolio 3 Fund (NXR)

This article is featuring another short duration municipal bond closed end fund (Muni bond CEF). If you miss, my previous article on Nuveen Select Maturities Municipal bond fund, please check my previous blog entry. This article will feature Nuveen Select Tax-Free Income Portfolio

Nuveen Select Tax-Free Income Portfolio 3 (NYSE: NXR)

Nuveen Select Tax Free Income Portfolio 3 fund (Ticker: NXR) is one of the three Nuveen Select Tax-Free Income Portfolio managed by Thomas C. Spalding Jr since 1999. Nuveen Select Tax Free Income Portfolio 3 fund objective is to provide current income exempt from regular federal income tax, consistent with capital preservation. The majority of fund’s asset is invested in long term investment grade rated municipal bonds or debts.

The fund manager may invest <20% of net assets in unrated municipal obligations with comparable quality. This Nuveen fund may be attractive to people who seeks monthly tax free income, diversification of asset portfolio, and attractive after-tax total returns. The fund currently has total net assets of $176 million.

Nuveen Select Tax Free Income 3 fund holdings

This Muni bond CEF is part of non leverage bond closed end fund (i.e. fixed income CEF). The fund has an annual expense ratio of 0.37% (0.36% baseline expense and 0.01% interest expense). The fund distribution rate is 4.95%. This yield is paid monthly. The fund average credit rating is AA (investment grade). The fund market price has returned -4.41% over the past year and 4.17% over the past 5 year.

As of March 2011, the Nuveen fund has 113 numbers of holdings. This closed end fund has an average coupon of 4.43%. The fund average maturity is 15.01 years and the fund average modified duration is 4.96 years. The average bond price is $83.62. Most of the fund asset is invested in the municipal bonds (98%).

The top 10 Muni bond sectors are U.S. guaranteed bonds, health care, limited tax obligation, utilities, transportation Muni bond, consumer staples, general tax obligation, education & civic organization, water & sewer, and single family housing bonds. The top 5 states include Illinois (18.83%), California (10.13%), Texas (10.03%), Colorado (6.91%), and Indiana (6.15%).

Investment risks include:

• Call risk or prepayment risk
• Interest rate risk
• Credit risk

You might be interested in these Nuveen funds as well:

• Nuveen Select Tax Free Income Portfolio (Ticker: NXP)
• Nuveen Select TaxFree Income Portfolio 2 (Ticker: NXQ)

How can I buy this CEF?

Since this CEF is traded like stock in NYSE (New York Stock Exchange), you can buy with any online discount brokerage like Lightspeed, Interactive Brokers (IB), Fidelity, Merrill Edge and many more.

Disclosure: No Position