UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Nuveen

AMT-Free

Municipal Credit Income Fund

 

(Exact name of registrant as specified in charter)

Nuveen Investments

333 West Wacker Drive

Chicago, IL 60606

 

(Address of principal executive offices) (Zip code)

Mark L. Winget

Nuveen Investments

333 West Wacker Drive

Chicago, IL 60606

 

(Name and address of agent for service)

 

 

 

Form is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule under the Investment Company Act of 1940 (17 CFR The Commission may use the information provided on Form in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507.

Nuveen Municipal Funds

 

Nuveen AMT-Free Municipal Credit Income Fund		NVG
Nuveen Municipal Credit Income Fund		NZF
Nuveen Municipal High Income Opportunity Fund		NMZ
Nuveen Municipal Credit Opportunities Fund		NMCO
Nuveen Dynamic Municipal Opportunities Fund		NDMO

 

 

 

 

 

Effective prior to the opening of business on April 17, 2023, Nuveen Ohio Quality Municipal Income Fund (NUO) and Nuveen Georgia Quality Municipal Income Fund (NKG) were each merged into NZF (“each a Merger”). Refer to the Notes to Financial Statements within this report for further details on the Merger.

Effective April 10, 2023, Daniel Close, CFA, and Stephen Candido, CFA, were added as portfolio managers of NMZ, NMCO and NDMO. Effective May 31, 2023, John Miller no longer serves as a portfolio manager of NMZ, NMCO and NDMO. Effective October 13, 2023, Steven Hlavin was added as a portfolio manager of NVG. Effective October 13, 2023, Kristen DeJong, CFA, was added as a portfolio manager of NZF. There were no other changes to the portfolio management of the Funds during the reporting period.

On November 29, 2023, the Funds’ Board of Trustees (the “Board”) updated the Fund’s distribution policy. Effective for distributions payable on December 29, 2023, the Fund’s distribution policy, which may be changed by the Board, is to make regular monthly cash distributions to holders of its common shares (stated in terms of a fixed cents per common share dividend distribution rate which may be set from time to time). The Fund intends to distribute all or substantially all of its net investment income through its regular monthly distribution and to distribute realized capital gains at least annually. In addition, in any monthly period, to maintain its declared per common share distribution amount, the Fund may distribute more or less than its net investment income during the period. In the event the Fund distributes more than its net investment income during any yearly period, such distributions may also include realized gains and/or a return of capital. To the extent that a distribution includes a return of capital the NAV per share may erode. If the Fund’s distribution includes anything other than net investment income, the Fund will provide a notice to shareholders of its best estimate of the distribution sources at that the time of the distribution. These estimates may not match the final tax characterization (for the full year’s distributions) contained in shareholders’ forms after the end of the year.

 

The U.S. economy performed better than expected despite persistent inflationary pressure and rising interest rates during the twelve-month period ended October 31, 2023. Gross domestic product accelerated sharply in third quarter of 2023 to an annualized rate of 5.2%, according to the U.S. Bureau of Economic Analysis second estimate, up from 2.1% in the second quarter of 2023. By comparison, GDP grew 2.1% in 2022 overall. Early in the reporting period, inflation had risen sharply because of supply chain disruptions and high food and energy prices, the Russia-Ukraine war and China’s restrictions (lifted in December 2022). Since then, price pressures have eased given normalization in supply chains, falling energy prices and aggressive measures by the U.S. Federal Reserve (Fed) and other global central banks to tighten financial conditions and slow demand in their economies. Nevertheless, during the reporting period inflation levels remained much higher than central banks’ target levels.

The Fed raised its target fed funds rate six times during the reporting period, bringing it to a range of 5.25% to 5.50% as of July 2023 and voting to hold it at that level at its next two meetings held near the end of the reporting period. For much of the reporting period, the Fed’s activity led to significant volatility in bond and stock markets, given the uncertainty of how rising interest rates would affect the economy. One of the most highly visible impacts occurred in the U.S. regional banking sector in March 2023, when Silicon Valley Bank, Signature Bank, First Republic Bank and Silvergate Bank failed. In the same month, Swiss bank UBS agreed to buy Credit Suisse, which was considered vulnerable in the current environment. The Fed’s monetary tightening policy also contributed to an increase in the U.S. dollar’s value relative to major world currencies, which acts as a headwind to the profits of international companies and U.S. domestic companies with overseas earnings.

During the reporting period, elevated inflation and higher borrowing costs weighed on some segments of the economy, including the real estate market. Consumer spending, however, has remained more resilient than expected, in part because of a still-strong labor market, another key gauge of the economy’s health. As of October 2023, the unemployment rate was 3.9%, rising from its low, with monthly job growth continuing to moderate. The strong labor market and wage gains helped the U.S. economy during the reporting period, even as the Fed sought to soften job growth to help curb inflation pressures.

During the reporting period, investors also continued to monitor government funding and deficits. The U.S. government avoided a default scenario after approving an increase to the debt ceiling limit in June 2023. At the same time, the potential for a government shutdown loomed but was ultimately avoided with funding resolutions passed in September 2023 and, subsequent to the close

 

 

of the reporting period, November 2023. Notably, in August 2023, ratings agency Fitch downgraded U.S. debt from AAA to AA+ based on concerns about the U.S.’s growing fiscal debt and reduced confidence in fiscal management.

The broad municipal bond market was impacted by interest rate volatility and economic uncertainty during the reporting period. Municipal yields rose across the maturity spectrum, but the move was uneven. The greatest increase in yields was at the shorter end of the curve as markets priced in a more aggressive pace of monetary tightening to combat persistently high inflation. Although municipal bonds continued to exhibit relatively strong credit fundamentals, there were periods of spread widening during the reporting period as the market continued.

NVG’s investment objectives are to provide current income exempt from regular federal income tax and federal alternative minimum tax applicable to individuals, and to enhance portfolio value relative to the municipal bond market. The Fund invests in municipal bonds that the portfolio management teams believe are underrated or undervalued or that represent municipal market sectors that are undervalued and uses leverage. Leverage is discussed in more detail in the Fund Leverage section of this report.

During the reporting period, the Fund’s trading activity remained focused on pursuing its investment objectives. The rising yield environment during this reporting period was favorable for the Fund to reset embedded yields higher in its portfolio, primarily by executing on swap opportunities. This strategy involves selling depreciated bonds with lower embedded yields to reinvest in similarly structured, higher income-producing bonds to support the Fund’s income earnings and capture tax efficiencies.

As of October 31, 2023, the Fund continued to use inverse floating rate securities. The Fund employs inverse floating rate securities, which are the residual interest in a tender option bond (TOB) trust, and are sometimes referred to as “inverse floaters,” for a variety of reasons, including duration management and income and total return enhancement.

For the twelve-month reporting period ended October 31, 2023, NVG underperformed the NVG Blended Benchmark. For purposes of this Performance Commentary, references to relative performance are in comparison to the NVG Blended Benchmark, which consists of 1) 60% S&P Municipal Bond Investment Grade Index and 2) 40% S&P Municipal Bond High Yield Index.

The primary detractor from NVG’s relative performance was the Fund’s use of leverage through its issuance of preferred shares and investments in inverse floating rate securities, which represent leveraged investments in underlying bonds. Leverage is discussed in more detail in the Fund Leverage section of this report.

Partially offsetting NVG’s underperformance were its underweight to shorter maturity bonds and corresponding overweight to longer maturity bonds. Additionally, the Fund’s credit quality positioning was also advantageous, as credit spreads narrowed occasionally throughout the period. The Fund continued to emphasize bonds rated grade and lower, which contributed positively to relative performance.

NZF’s investment objectives are to provide current income exempt from regular federal income tax and to enhance portfolio value relative to the municipal bond market. The Fund invests in municipal bonds that the portfolio management teams believe are underrated or undervalued or that represent municipal market sectors that are undervalued and uses leverage. Leverage is discussed in more detail in the Fund Leverage section of this report.

During the reporting period, the Fund’s trading activity remained focused on pursuing its investment objectives. The rising yield environment during this reporting period was favorable for the Fund to reset embedded yields higher in its portfolio, primarily by executing on swap opportunities. This strategy involves selling depreciated bonds with lower embedded yields to reinvest in similarly structured, higher income-producing bonds to support the Fund’s income earnings and capture tax efficiencies.

 

 

Additionally, NZF continued its rotation into lower rated credit by selling AAA and AA rated bonds, which were purchased when rates were lower as temporary placeholders because of their liquidity profiles. The portfolio management team reinvested the proceeds in A, BBB and below investment grade rated bonds. As a result of this rotation strategy, the Fund’s exposures to the health care and transportation sectors increased while exposures to dedicated tax, and water and sewer bonds decreased.

As of October 31, 2023, the Fund continued to use inverse floating rate securities. The Fund employs inverse floating rate securities, which are the residual interest in a tender option bond (TOB) trust, and are sometimes referred to as “inverse floaters,” for a variety of reasons, including duration management and income and total return enhancement.

For the twelve-month reporting period ended October 31, 2023, NZF underperformed the NZF Blended Benchmark. For purposes of this Performance Commentary, references to relative performance are in comparison to the NZF Blended Benchmark, which consists of 1) 60% S&P Municipal Bond Investment Grade Index and 2) 40% S&P Municipal Bond High Yield Index.

The primary detractor from NZF’s relative performance was the Fund’s use of leverage through its issuance of preferred shares and investments in inverse floating rate securities, which represent leveraged investments in underlying bonds. Leverage is discussed in more detail in the Fund Leverage section of this report.

Partially offsetting NZF’s underperformance were its underweight to shorter-maturity bonds and corresponding overweight to longer maturity bonds. NZF also benefited from its overweight to the transportation sector, particularly “other transportation” bonds, which was one of the better-performing sectors during the period. The Fund’s credit quality positioning was also advantageous, as credit spreads narrowed occasionally throughout the period. Overweight allocations to mid investment grade and lower added to relative performance as these categories outperformed the highest investment grade categories.

NMZ’s primary investment objective is to provide high current income exempt from regular federal income tax. Its secondary investment objective is to seek attractive total return consistent with its primary objective. NMZ invests in an actively managed portfolio of municipal securities and uses leverage. Leverage is discussed in more detail in the Fund Leverage section of this report.

During the reporting period, the Fund’s trading activity remained focused on pursuing its investment objectives. The rising yield environment during this reporting period was favorable for the Fund to reset embedded yields higher in its portfolio, primarily by executing on swap opportunities. This strategy involves selling depreciated bonds with lower embedded yields to reinvest in similarly structured, higher income-producing bonds to support the Fund’s income earnings and capture tax efficiencies. The portfolio management team also reduced the Fund’s equity positions in American Airlines and Talen Energy (both of which were acquired in restructurings) when it was favorable to do so during the reporting period.

As of October 31, 2023, the Fund continued to use inverse floating rate securities. The Fund employs inverse floating rate securities, which are the residual interest in a tender option bond (TOB) trust, and are sometimes referred to as “inverse floaters,” for a variety of reasons, including duration management and income and total return enhancement.

For the twelve-month reporting period ended October 31, 2023, NMZ underperformed the S&P Municipal Yield Index. For purposes of this Performance Commentary, references to relative performance are in comparison to the S&P Municipal Yield Index.

The primary detractor from NMZ’s relative performance was the Fund’s use of leverage through its issuance of preferred shares and investments in inverse floating rate securities, which represent leveraged investments in underlying bonds. However, the Fund’s use of leverage was accretive to overall common share income. Leverage is discussed in more detail in the Fund Leverage section of this report.

 

 

Leading individual detractors included the Fund’s exposures to Puerto Rico Electric Power Authority (PREPA) bonds and certain project finance bonds, which faced a variety of project-specific challenges during the period. PREPA underperformed given the issuer’s ongoing restructuring. The Fund continued to hold PREPA based on the portfolio management team’s outlook.

Partial offsets to NMZ’s relative underperformance included its, credit quality positioning. Credit spreads narrowed occasionally throughout the period and the Fund benefited from an overweight to bonds and a corresponding underweight to the highest grade (AAA and AA rated) bonds.

NMCO’s primary investment objective is to provide a high level of current income exempt from regular U.S. federal income tax and secondarily, total return. NMCO invests primarily in high yielding, low to medium-quality municipal securities, and uses leverage. Leverage is discussed in more detail in the Fund Leverage section of this report.

During the reporting period, the Fund’s trading activity remained focused on pursuing its investment objectives. The rising yield environment during this reporting period was favorable for the Fund to reset embedded yields higher in its portfolio, primarily by executing on swap opportunities. This strategy involves selling depreciated bonds with lower embedded yields to reinvest in similarly structured, higher income-producing bonds to support the Fund’s income earnings and capture tax efficiencies. Additionally, NMCO was active in reducing leverage levels during the reporting period. Please see the Notes to Financial Statements for additional details.

As of October 31, 2023, the Fund continued to use inverse floating rate securities. The Fund employs inverse floating rate securities, which are the residual interest in a tender option bond (TOB) trust, and are sometimes referred to as “inverse floaters,” for a variety of reasons, including duration management and income and total return enhancement.

For the twelve-month reporting period ended October 31, 2023, NMCO significantly underperformed the S&P Municipal Yield Index. For purposes of this Performance Commentary, references to relative performance are in comparison to the S&P Municipal Yield Index.

The primary driver of NMCO’s underperformance was the Fund’s use of leverage, which detracted significantly. The Fund uses leverage through its issuance of preferred shares and investments in inverse floating rate securities, which represent leveraged investments in underlying bonds. Leverage is discussed in more detail in the Fund Leverage section of this report.

Further, the Fund’s exposure to Puerto Rico Electric Power Authority (PREPA) bonds detracted. PREPA underperformed given the ongoing restructuring, along with certain underperforming project finance bonds that faced project-specific challenges during the period. The Fund continued to hold PREPA based on the portfolio management team’s outlook.

Partially offsetting the Fund’s underperformance was its credit quality positioning, as credit spreads narrowed occasionally throughout the period. The Fund benefited from its overweights to below investment grade and bonds. Additional contributors included overweights to sectors such as transportation and dedicated tax, which were some of the sectors.

NDMO’s investment objective is to provide total return through income exempt from regular federal income taxes and capital appreciation. NDMO invests primarily in municipal securities, the income on which is exempt from regular U.S. federal income tax and uses leverage. Leverage is discussed in more detail in the Fund Leverage section of this report.

During the reporting period, the Fund’s trading activity remained focused on pursuing its investment objectives. The rising yield environment during this reporting period was favorable for the Fund to reset embedded yields higher in its portfolio, primarily by

 

 

executing on swap opportunities. This strategy involves selling depreciated bonds with lower embedded yields to reinvest in similarly structured, higher income-producing bonds to support the Fund’s income earnings and capture tax efficiencies.

Additionally, during the reporting period NDMO was active in reducing leverage levels. Please see the Notes to Financial Statements for additional details. NDMO also actively sought to reduce its overall duration profile by selling positions in longer-duration bonds and by collapsing certain tender option bond (TOB) structures that were no longer cost-efficient because of rising borrowing costs.

As of October 31, 2023, the Fund continued to use inverse floating rate securities. The Fund employs inverse floating rate securities, which are the residual interest in a tender option bond (TOB) trust, and are sometimes referred to as “inverse floaters,” for a variety of reasons, including duration management and income and total return enhancement.

For the twelve-month reporting period ended October 31, 2023, NDMO underperformed the S&P Municipal Bond Index. For purposes of this Performance Commentary, references to relative performance are in comparison to the S&P Municipal Bond Index.

The primary detractor from NDMO’s relative performance was the Fund’s use of leverage through its issuance of preferred shares and investments in inverse floating rate securities, which represent leveraged investments in underlying bonds. Leverage is discussed in more detail in the Fund Leverage section of this report.

Further, the Fund’s exposure to Puerto Rico Electric Power Authority (PREPA) bonds detracted. PREPA underperformed given the ongoing restructuring, along with certain underperforming project finance bonds that faced project-specific challenges during the period. The Fund continued to hold PREPA based on the portfolio management team’s outlook.

Partially offsetting the Fund’s underperformance were its overweights to the tobacco, transportation and dedicated tax sectors, which performed well, and an underweight to housing, which underperformed. In addition, NDMO was aided by strong performance from positions in Brightline, Puerto Rico sales tax revenue bonds known as COFINAs, Big River Steel and American Dream, and an opportunistic investment in short-term Treasury bills. The Fund continued to maintain exposures to the credits listed above but closed out its position in Treasury bills prior to the end of the reporting period.

The Fund managed the duration of its portfolio by shorting interest rate futures contracts. The interest rate futures contracts had a negligible impact on relative performance during the reporting period.

 

 

 

One important factor impacting the returns of the Funds’ common shares relative to their comparative benchmarks was the Funds’ use of leverage through their issuance of preferred shares and/or investments in inverse floating rate securities, which represent leveraged investments in underlying bonds. The Funds use leverage because our research has shown that, over time, leveraging provides opportunities for additional income. The opportunity arises when short-term rates that a Fund pays on its leveraging instruments are lower than the interest the Fund earns on its portfolio of long-term bonds that it has bought with the proceeds of that leverage.

However, use of leverage can expose Fund common shares to additional price volatility. When a Fund uses leverage, the Fund’s common shares will experience a greater increase in their net asset value if the securities acquired through the use of leverage increase in value, but will also experience a correspondingly larger decline in their net asset value if the securities acquired through leverage decline in value. All this will make the shares’ total return performance more variable over time.

In addition, common share income in levered funds will typically decrease in comparison to unlevered funds when short-term interest rates increase and increase when short-term interest rates decrease. In recent quarters, fund leverage expenses have generally tracked the overall movement of short-term interest rates. While fund leverage expenses are higher than their prior year lows, leverage nevertheless continues to provide the opportunity for incremental common share income, particularly over longer-term periods.

NVG, NZF, NMZ and NDMO’s use of leverage detracted from relative performance over this reporting period while NMCO’s use of leverage significantly detracted. However, NMZ’s use of leverage was accretive to overall common share income.

As of October 31, 2023, the Funds’ percentages of leverage are as shown in the accompanying table.

 

 

As of October 31, 2023, the Funds have issued and outstanding preferred shares as shown in the accompanying table.

 

 

Refer to Notes to Financial Statements for further details on preferred shares and each Fund’s respective transactions.

 

The following information regarding the distributions for NVG, NZF, NMZ and NMCO are current as of October 31, 2023. Each Fund’s distribution levels may vary over time based on each Fund’s investment activity and portfolio investments value changes.

During the current reporting period, each Fund’s distributions to common shareholders were as shown in the accompanying table.

 

 

NVG, NZF, NMZ and NMCO seek to pay regular monthly dividends out of their net investment income at a rate that reflects their past and projected net income performance. To permit each Fund to maintain a more stable monthly dividend, the Fund may pay dividends at a rate that may be more or less than the amount of net income actually earned by the Fund during the period. Distributions to common shareholders are determined on a tax basis, which may differ from amounts recorded in the accounting records. In instances where the monthly dividend exceeds the earned net investment income, the Fund would report a negative undistributed net ordinary income. Refer to Notes to Financial Statements for additional information regarding the amounts of undistributed net ordinary income and undistributed net long-term capital gains and the character of the actual distributions paid by the Fund during the period.

All monthly dividends paid by NVG and NZF during the current reporting period were paid from net investment income. If a portion of the Fund’s monthly distributions is sourced or comprised of elements other than net investment income, including capital gains and/or a return of capital, shareholders will be notified of those sources. During the current fiscal period, NMZ’s and NMCO’s distributions were slightly greater than each Fund’s interest income, net of Fund expenses. As a result a portion of NMZ’s and NMCO’s distributions were deemed to be a return of capital. For financial reporting purposes, the per share amounts of each Fund’s distributions for the reporting period are presented in this report’s Financial Highlights. For income tax purposes, distribution information for each Fund as of its most recent tax year end is presented within the Notes to Financial Statements of this report.

On October 23, 2023, the Funds’ Board of Trustees (the “Board”) updated each Fund’s distribution policy. Effective for distributions payable on December 1, 2023, each Fund’s distribution policy, which may be changed by the Board, is to make regular monthly cash distributions to holders of its common shares (stated in terms of a fixed cents per common share dividend distribution rate which may be set from time to time). The Fund intends to distribute all or substantially all of its net investment income through its regular monthly distribution and to distribute realized capital gains at least annually. In addition, in any monthly period, to maintain its declared per common share distribution amount, the Fund may distribute more or less than its net investment income during the period. In the event the Fund distributes more than its net investment income during any yearly period, such distributions may also include realized gains and/or a return of capital. To the extent that a distribution includes a return of capital the NAV per share may erode. If the Fund’s distribution includes anything other than net investment income, the Fund will provide a notice to shareholders of its best estimate of the distribution sources at that the time of the distribution. These estimates may not match the final tax characterization (for the full year’s distributions) contained in shareholders’ forms after the end of the year.

 

 

NDMO makes regular cash distributions to shareholders of a stated dollar amount per share. Subject to approval and oversight by the Board of Trustees, the Fund seeks to maintain a stable distribution level designed to deliver the long-term return potential of the Fund’s investment strategy through regular distributions (a “Managed Distribution Program”). The practice of maintaining a stable distribution level had no material effect on the Fund’s investment strategy during the most recent fiscal period and is not expected to have such an effect in future periods, however, distributions in excess of Fund returns will cause its NAV per share to erode. For additional information, refer to the distribution information section below and in the Notes to Financial Statements herein.

This notice provides shareholders with information regarding fund distributions, as required by current securities laws. You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s Managed Distribution Policy.

The following table provides estimates of the Fund’s distribution sources, reflecting cumulative experience through the prior to the latest distribution. The Fund attributes these estimates equally to each regular distribution throughout the year. Consequently, the estimated information as of the specified shown below is for the current distribution, and also represents an updated estimate for all prior months in the year. It is estimated that the Fund has distributed more than its income and net realized capital gains; therefore, a portion of the distributions may be (and is shown below as being estimated to be) a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.”

The amounts and sources of distributions reported in this notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send a Form for the calendar year that will tell you how to report these distributions for federal income tax purposes. More details about the Fund’s distributions and the basis for these estimates are available on www.nuveen.com/cef.

 

The following table provides information regarding the Fund’s distributions and total return performance over various time periods. This information is intended to help you better understand whether the Fund’s returns for the specified time periods were sufficient to meet its distributions.

 

The Nuveen Funds’ monthly and quarterly periodic distributions to shareholders are posted on www.nuveen.com and can be found on Nuveen’s enhanced fund resource page, which is at https://www.nuveen.com/resource-center-closedend funds, along with other Nuveen fund product updates. To ensure timely access to the latest information, shareholders may use a subscribe function, which can be activated at this web page (https://www.nuveen.com/subscriptions).

During the current reporting period, NVG, NMZ, NMCO and NDMO were authorized by the Securities and Exchange Commission to issue additional common shares through an equity shelf program (Shelf Offering). Under these programs, NVG, NMZ, NMCO and NDMO, subject to market conditions, may raise additional capital from time to time in varying amounts and offering methods at a net price at or above the Fund’s NAV per common share. The maximum aggregate offering under these Shelf Offerings are as shown in the accompanying table.

 

 

 

 

During the current reporting period, NMZ and NMCO sold common shares through their Shelf Offering at a weighted average premium to their NAV per common share as shown in the accompanying table.

 

Refer to Notes to Financial Statements, for further details of Shelf Offerings and each Fund’s transactions.

The Funds’ Board of Trustees reauthorized an open-market share repurchase program, allowing each Fund to repurchase and retire an aggregate of up to approximately 10% of its outstanding common shares.

As of October 31, 2023, (and since the inception of the Funds’ repurchase programs), each Fund has cumulatively repurchased and retired its outstanding common shares as shown in the accompanying table.

 

During the current reporting period, the following Fund repurchased and retired its common shares at a weighted average price per share and a weighted average discount per share as shown in the following table.

 

As of October 31, 2023, the Funds’ common share prices were trading at a premium/(discount) to their common share NAVs and trading at an average premium/(discount) to NAV during the current reporting period, as follows:

 

 

 

 

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15

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.

 

*For purposes of Fund performance, relative results are measured against the NVG Blended Benchmark. The Fund’s Blended Benchmark consists of: 1) 60% S&P Municipal Bond Investment Grade Index and 2) 40% S&P Municipal Bond High Yield Index. The Fund’s performance was measured against the S&P Municipal Bond Index through April 10, 2016.

Performance data shown represents past performance and does not predict or guarantee future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.

 

 

 

 

The ratings disclosed are the lowest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.

 

Fund Allocation (% of net assets)
Municipal Bonds			170.8%
Common Stocks			2.4%
Short-Term Municipal Bonds			1.6%
Other Assets & Liabilities, Net			3.1%
Floating Rate Obligations			(8.4)%
MFP Shares, Net			(20.5)%
VRDP Shares, Net			(49.0)%
Net Assets			100%

Portfolio Credit Quality (% of total investment exposure)
U.S. Guaranteed			7.2%
AAA			6.1%
AA			16.3%
A			22.0%
BBB			19.3%
BB or Lower			10.2%
N/R (not rated)			17.5%
N/A (not applicable)			1.4%
Total			100%

Portfolio Composition (% of total investments)
Tax Obligation/Limited			19.3%
Health Care			14.1%
Tax Obligation/General			11.9%
Transportation			10.3%
Utilities			9.7%
Education and Civic Organizations			9.4%
U.S. Guaranteed			7.2%
Other			16.7%
Common Stocks			1.4%
Total			100%

States and Territories 1 (% of total municipal bonds)
Illinois			15.0%
Texas			7.9%
California			7.5%
Colorado			5.9%
Ohio			5.6%
New York			5.4%
Puerto Rico			4.4%
New Jersey			3.9%
Connecticut			3.2%
Pennsylvania			3.1%
Georgia			2.7%
Wisconsin			2.6%
Florida			2.6%
District of Columbia			2.3%
Indiana			1.6%
South Carolina			1.5%
Massachusetts			1.5%
Michigan			1.4%
Alabama			1.4%
Arizona			1.4%
Missouri			1.4%
Kentucky			1.3%
North Dakota			1.2%
Rhode Island			1.2%
Minnesota			1.2%
Other			12.8%
Total			100%

 

 

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.

 

* For purposes of Fund performance, relative results are measured against the NZF Blended Benchmark. The Fund’s Blended Benchmark consists of: 1) 60% S&P Municipal Bond Investment Grade Index and 2) 40% S&P Municipal Bond High Yield Index. The Fund’s performance was measured against the S&P Municipal Bond Index through April 10, 2016.

Performance data shown represents past performance and does not predict or guarantee future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.

 

 

 

 

The ratings disclosed are the lowest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.

 

Fund Allocation (% of net assets)
Municipal Bonds			165.9%
Common Stocks			5.2%
Investment Companies			0.0%
Other Assets & Liabilities, Net			1.8%
Floating Rate Obligations			(16.2)%
MFP Shares, Net			(27.6)%
VRDP Shares, Net			(29.1)%
Net Assets			100%

Portfolio Credit Quality (% of total investment exposure)
U.S. Guaranteed			3.8%
AAA			1.1%
AA			13.0%
A			27.9%
BBB			24.7%
BB or Lower			13.2%
N/R (not rated)			13.3%
N/A (not applicable)			3.0%
Total			100%

Portfolio Composition (% of total investments)
Health Care			22.4%
Transportation			21.1%
Tax Obligation/Limited			18.5%
Tax Obligation/General			13.4%
Utilities			7.9%
U.S. Guaranteed			3.6%
Education and Civic Organizations			3.0%
Other			7.1%
Common Stocks			3.0%
Investment Companies			0.0%
Total			100%

States and Territories 1 (% of total municipal bonds)
Illinois			15.1%
California			13.5%
New York			10.4%
Texas			6.9%
Ohio			5.9%
Florida			5.8%
New Jersey			4.6%
Puerto Rico			4.2%
Colorado			4.2%
Pennsylvania			3.9%
Georgia			3.0%
Washington			2.3%
Virginia			2.2%
South Carolina			2.2%
Wisconsin			1.4%
Oklahoma			1.4%
Louisiana			1.2%
Minnesota			1.2%
North Dakota			1.2%
Michigan			1.0%
Other			8.4%
Total			100%

 

 

 

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.

 

*For purposes of Fund performance, relative results are measured against the S&P Municipal Yield Index.

Performance data shown represents past performance and does not predict or guarantee future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.

 

 

 

 

The ratings disclosed are the lowest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.

 

Fund Allocation (% of net assets)
Municipal Bonds			164.4%
Common Stocks			5.7%
Variable Rate Senior Loan Interests			0.0%
Other Assets & Liabilities, Net			2.7%
Floating Rate Obligations			(38.8)%
AMTP Shares, Net			(34.0)%
Net Assets			100%

Portfolio Credit Quality (% of total investment exposure)
U.S. Guaranteed			0.8%
AAA			0.5%
AA			8.3%
A			15.9%
BBB			13.6%
BB or Lower			8.2%
N/R (not rated)			49.4%
N/A (not applicable)			3.3%
Total			100%

Portfolio Composition (% of total investments)
Tax Obligation/Limited			29.2%
Transportation			18.0%
Education and Civic Organizations			12.2%
Health Care			11.0%
Tax Obligation/General			7.0%
Housing/Multifamily			5.0%
Industrials			4.2%
Other			10.1%
Common Stocks			3.3%
Variable Rate Senior Loan Interests			0.0%
Total			100%

States and Territories 1 (% of total municipal bonds)
Florida			13.9%
Illinois			11.0%
Colorado			8.9%
California			8.6%
New York			7.4%
Puerto Rico			6.4%
Wisconsin			5.2%
Texas			4.0%
Missouri			3.2%
Arizona			2.7%
New Jersey			2.6%
Ohio			2.6%
Virginia			2.6%
Kentucky			2.0%
Michigan			1.9%
District of Columbia			1.6%
Alabama			1.5%
South Carolina			1.4%
Oklahoma			1.2%
Iowa			1.2%
Pennsylvania			1.1%
Indiana			1.0%
Louisiana			0.8%
Virgin Islands			0.7%
Massachusetts			0.7%
Other			5.8%
Total			100%

 

 

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.

 

*For purposes of Fund performance, relative results are measured against the S&P Municipal Yield Index.

Performance data shown represents past performance and does not predict or guarantee future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.

 

 

 

 

 

The ratings disclosed are the lowest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.

 

Fund Allocation (% of net assets)
Municipal Bonds			168.3%
Common Stocks			13.2%
Variable Rate Senior Loan Interests			0.0%
Other Assets & Liabilities, Net			(2.8)%
Floating Rate Obligations			(3.6)%
MFP Shares, Net			(75.1)%
Net Assets			100%

Portfolio Credit Quality (% of total investment exposure)
U.S. Guaranteed			0.2%
AA			1.1%
A			6.3%
BBB			11.1%
BB or Lower			16.9%
N/R (not rated)			57.2%
N/A (not applicable)			7.2%
Total			100%

Portfolio Composition (% of total investments)
Tax Obligation/Limited			21.2%
Transportation			19.0%
Education and Civic Organizations			12.9%
Industrials			6.9%
Consumer Staples			6.8%
Long-Term Care			6.6%
Tax Obligation/General			6.3%
Health Care			5.5%
Other			7.5%
Common Stocks			7.3%
Variable Rate Senior Loan Interests			0.0%
Total			100%

States and Territories 1 (% of total municipal bonds)
Florida			18.3%
Illinois			8.2%
Wisconsin			8.2%
Colorado			7.2%
New York			6.4%
Ohio			5.7%
Puerto Rico			4.8%
California			3.7%
Alabama			3.4%
Pennsylvania			3.2%
Texas			3.0%
Georgia			2.4%
Arizona			2.4%
New Jersey			2.3%
District of Columbia			2.2%
Virgin Islands			2.0%
Utah			1.7%
Louisiana			1.2%
Kansas			1.2%
Idaho			1.2%
Arkansas			1.0%
Tennessee			0.8%
Alaska			0.8%
Iowa			0.7%
Massachusetts			0.7%
Other			7.3%
Total			100%

 

 

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this section.

 

*For purposes of Fund performance, relative results are measured against the S&P Municipal Bond Index.

Performance data shown represents past performance and does not predict or guarantee future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Returns at NAV are net of Fund expenses, and assume reinvestment of distributions. Comparative index return information is provided for the Fund’s shares at NAV only. Indexes are not available for direct investment.

 

 

 

 

 

The ratings disclosed are the lowest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Holdings designated N/R are not rated by these national rating agencies.

 

Fund Allocation (% of net assets)
Municipal Bonds			139.4%
Corporate Bonds			1.4%
Common Stocks			0.2%
Variable Rate Senior Loan Interests			0.0%
Short-Term Municipal Bonds			1.6%
Other Assets & Liabilities, Net			(1.4)%
Floating Rate Obligations			(0.1)%
MFP Shares, Net			(41.1)%
Net Assets			100%
Portfolio Credit Quality (% of total investment exposure)
U.S. Guaranteed			0.1%
AAA			1.3%
AA			13.7%
A			24.8%
BBB			7.4%
BB or Lower			12.7%
N/R (not rated)			39.9%
N/A (not applicable)			0.1%
Total			100%

Portfolio Composition (% of total investments)
Tax Obligation/Limited			24.4%
Transportation			22.2%
Education and Civic Organizations			12.2%
Utilities			11.5%
Health Care			9.9%
Tax Obligation/General			7.2%
Industrials			6.3%
Other			5.2%
Corporate Bonds			1.0%
Common Stocks			0.1%
Variable Rate Senior Loan Interests			0.0%
Total			100%

States and Territories 1 (% of total municipal bonds)
New York			13.9%
Colorado			12.6%
Florida			11.0%
Texas			10.2%
Illinois			5.6%
Arizona			5.3%
California			4.9%
Alabama			4.1%
Puerto Rico			3.2%
Michigan			2.9%
Pennsylvania			2.9%
Wisconsin			2.8%
Tennessee			2.6%
Ohio			2.2%
Indiana			2.1%
Virginia			1.4%
Arkansas			1.2%
Washington			1.0%
Kentucky			0.9%
Missouri			0.9%
Minnesota			0.8%
Georgia			0.8%
New Jersey			0.8%
West Virginia			0.7%
New Mexico			0.7%
Other			4.5%
Total			100%