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Nuveen Multi Strategy Income and Growth Fund I (NYSE:JPC) and Nuveen Multi Strategy Income and Growth Fund 2 (NYSE:JQC) are fairly large hybrid income funds, both traded on the New York Stock Exchange. Their investment manager, Nuveen, needs no introduction as they are one of the largest fixed income investment advisors in the United States.

Over the past five years, JPC has had an average annual return of 2.12% while JQC has had an annual return of 2.93%, all against their comparative benchmark of 4.57%. Please bear in mind that each portfolio has almost 28% in common stock. Each of the funds is leveraged at approximately 23% as of June 30, 2011.

Each portfolio is almost identical in allocation, with JPC having the following five largest allocations:

Common Stock: 27.7%
$25 Par Preferred Securities: 24.2%
Capital preferred Stock: 19.2%
Corporate Bonds: 9.5%
Convertible Bonds: 8.7%

The five largest categories of JQC, are as follows:

Common Stock: 27.8%
$25 Par Preferred Securities: 26.2%
Capital Preferred Stock: 18.0%
Corporate Bonds: 9.1%
Convertible Bonds: 8.3%

Each of the portfolios are extremely well diversified and enormous, consisting of hundreds of different securities. JPC has $ 279 million of leverage with net assets of $948 million. JQC has $412 million of leverage with net assets of $1.4 billion.

Both JPC and JQC have the common investment objectives of high current income with a secondary objective of total return. They both presently sell at a discount of approximately 10% from net asset value, with this discount periodically going higher.

I have written in the past about foolish approaches used by management to narrow the discount. Almost all these approaches have met with my disapproval. I have also stressed how a narrower investment approach, as opposed to a defused approach, will narrow the discount as it will appeal to investors seeking a single approach.

Nuveen has elected to narrow the discounts of both JPC and JQC by taking a proper and well thought out direction. They have obviously given this much thought and have come to the proper conclusions. They truly deserve much respect.

JPC will adopt a single strategy, preferred securities approach. The name will be changed to Nuveen Preferred Income Opportunities Fund to reflect the funds' new emphasis. This is being done specifically to increase the fund's attractiveness and to narrow its discount from net asset value. Management intends to position the fund in a well understood category that has historically seen more consistent secondary market demand. This change will also differentiate the funds from similar funds.

JQC will also adopt a single strategy, a debt oriented approach. The name will be changed to Nuveen Credit Strategies Income Fund. This change is being done for the identical reasons as JPC.

I applaud Nuveen for its clarity of thought and maintenance of sanity. This is the right approach and will serve shareholders well. It will produce a consistently lower discount to net asset value and probably a better overall return. A narrow focus is something other fund managers should also contemplate in their existing products.

Watch the discount from net asset value and buy whenever it widens. JPC and JQC are very worthwhile investments when their discounts exceed 12%.

Disclosure: I am long JPC, JQC.