NPFD: Discount Remains Unappealing And In The Wrong Environment

Nick Ackerman Investing Group Follow Summary Nuveen Variable Rate Preferred & Income Fund remains a 'Hold' as rate sensitivity and a modest discount limit appeal. Despite its name, NPFD is mostly fixed-to-fixed rate preferreds, resulting in a leveraged-adjusted effective duration of 5.53 years leading to meaningful interest rate risk. Distribution coverage is pressured, with net investment income coverage lacking and likely to fall even shorter going forward. This idea was discussed in more depth with members of my private investing community, CEF/ETF Income Laboratory. Learn More » Torsten Asmus/iStock via Getty Images Written by Nick Ackerman, co-produced by Stanford Chemist The Nuveen Variable Rate Preferred & Income Fund ( NPFD ) is a closed-end fund that has been facing pressure given its fixed-rate exposure. That is, despite the "variable" portion of its This article was written by Nick Ackerman 16.28K Followers Follow Nick Ackerman is a former financial advisor using his experience to provide coverage on closed-end funds and exchange-traded funds. Nick has previously held Series 7 and Series 66 licenses and has been investing personally for over 14 years.He contributes to the investing group CEF/ETF Income Laboratory along with leader Stanford Chemist, and Juan de la Hoz and Dividend Seeker. They help members benefit from income and arbitrage strategies in CEFs and ETFs by providing expert-level research. The service includes: managed portfolios targeting safe 8%+ yields, actionable income and arbitrage recommendations, in-depth analysis of CEFs and ETFs, and a friendly community of over a thousand members looking for the best income ideas. These are geared towards both active and passive investors. The vast majority of their holdings are also monthly-payers, which is great for faster compounding as well as smoothing income streams. Learn More. Analyst’s Disclosure: I/we have a beneficial long position in the shares of FLC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.