PM Images The Nuveen Preferred & Income Term Fund ( NYSE: JPI ) is a closed-end fund, or CEF, that can be employed by income-focused investors who are seeking to maximize the income that they receive from their portfolios. As the name of the fund suggests, the Nuveen Preferred & Income Term Fund seeks to accomplish this task by investing primarily in fixed-income securities, which unfortunately means that its ability to protect against inflation is relatively limited. After all, as I have pointed out in numerous previous articles (such as this one ), fixed-income securities do not appreciate in price due to inflation because they have no connection to the net income or cash flow growth of the issuing company.
There are numerous reasons to expect that inflation will be a continual problem in the United States going forward, which is the reason why gold prices keep going up every time the market starts to think that the Federal Reserve will cut interest rates. After all, the data right now says that if the central bank genuinely wants to stop inflation, then it needs to start hiking interest rates and shock the market. In short, the Nuveen Preferred & Income Fund can provide us with a reasonable level of income, but it is not necessarily going to protect the purchasing power of our money over time.
The fund’s current yield is also a bit low for a preferred stock fund. As of the time of writing, the Nuveen Preferred & Income Term Fund has a 6.09% distribution yield.
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