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Nuveen Senior Income Fund: Rates Went Up, It Responded

Maks F. S. profile picture
Maks F. S.


  • A general update of NSL since our initial article.
  • A discussion of major economic changes impacted the fund.
  • A look at various performance metrics comparing NSL to its peers.

Towards the end of last year I started looking at CEFs that were positioned well for any coming rate hikes. One of those funds is the Nuveen Senior Income Fund (NYSE:NSL). Since it has been more than 3 quarters since I last wrote about it, now is a great time to do an update on the fund.

What's New?

The most obvious impact to the fund is the fact that the Federal Reserve has raised interest rates.

While many fixed income investments were negatively impacted, floating rate securities were positively affected as their loans coupons began adjusting up.

Fund Updates

At the time of our initial article, the fund yielded a 7.08% distribution and traded a discount of 7.99% to its NAV. Today the fund yields a 6.93% distribution and trades at a discount of 1.01%.

Below is a chart showing the relationship between the price and NAV over the past year.

As we can see, shortly after writing my initial article, the discount to NAV quickly started to close down and even turned into a premium earlier this year.

The net result for shareholders is that even though the underlying value of the fund has stayed relatively flat, the discount to NAV essentially disappeared and shareholders were able to capture some gains.

Taking a look at the portfolio, we can see the majority of the fund is still in floating rate senior loans.

Source: Nuveen NSL Website

The major change from our initial article is that the high yield bonds allocation is up about 2%, with funds deployed from cash.

Source: Nuveen NSL Website

The top ten shows household names such as Dell and Albertsons.

Finally, we can take a look at the fund characteristics.

Source: Nuveen NSL Website

From the above stats we can see that the fund

This article was written by

Maks F. S. profile picture
Intrepid Leader at an RIA.  My firm and I simplify the lives of busy clients by providing ongoing financial planning and asset management. this is done by providing our clients customized, ongoing comprehensive financial planning, and customized investment advisory services tailored to the clients' needs. As a fiduciary, we have a legal obligation to put the needs and interests of our clients above our own. Specialties: fee based comprehensive financial planning, retirement planning, life insurance and protection planning.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

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