Survey Points to Continued Low Interest Rates Behind Rise in
Closed-End Funds’ Use Among Financial Advisors Counseling Retirees
CHICAGO–(BUSINESS WIRE)–Nuveen, an operating division of TIAA Global Asset Management, today
announced the second installment of results of a 2016 survey focused on
the usage of closed-end funds among financial advisors. As retirees in
today’s low interest-rate environment seek more income, 85 percent of
financial advisors surveyed believe increasing an allocation to
closed-end funds as investors enter retirement can help them bolster
their overall income.
The study examined the connection between investors’ growing need for
retirement income and an uptick in closed-end fund usage. In September,
two-thirds of advisors now use closed-end funds compared to just
over half (51 percent) in 2013, the last time Nuveen commissioned
The study confirms that increasing income (58 percent) and diversifying
income (53 percent) are the two most compelling reasons advisors use
closed-end funds in client portfolios. These reasons also influence why
advisors recommend closed-end fund allocation increases for investors in
or near retirement.
Nearly two-thirds (62 percent) of advisors note that when they recommend
increasing closed-end fund allocation at retirement, they are doing so
to diversify income. Approximately one-third further recommend using
such funds in retirement income portfolios as they are designed to take
advantage of modest amounts of leverage and to boost returns without
changing the risk composition of an investor’s portfolio.
“Closed-end funds should be considered an essential part of a retirement
income portfolio for many investors, especially in a market environment
where interest rates, and as a result, fixed-income yields remain at
unprecedented lows,” says Anne Kritzmire, managing director of
closed-end funds at Nuveen. “The unique, yet surprisingly simple
structure of closed-end funds is offers great potential for diversified,
attractive, and regular cash flow over the long term, and is drawing the
attention of advisors in pursuit of high income and distributions for
Advisors noted that investing for income is a chief concern for those
clients in or nearing retirement, who also are extremely concerned about
protecting principal (73 percent) and covering health-care costs (72
percent) in retirement.
In the ongoing search for yield, two-thirds of advisors agree that
closed-end funds can help investors enjoy increased cash flow, and a
similar proportion (65 percent) consider closed-end funds appropriate
for long-term investors.
For additional information and resources related to the findings of the
2016 Closed-End Fund Survey, visit www.nuveen.com/CEFresearch.
About the 2016 Closed-End Fund Usage Study
Dubick & Associates conducted the updated version of the 2013 study of
financial advisors’ closed-end fund usage on behalf of Nuveen using a
sample drawn from the Discovery Database. The study included a weighted
sample of 326 financial advisors from wirehouses, regional
broker/dealers, independent broker/dealers, registered investment
advisors, banks and insurance companies. The 2016 study was fielded from
April 19-28, 2016.
Nuveen provides investment solutions designed to help secure the
long-term goals of individual investors and the advisors who serve them.
Through the investment expertise of leading asset managers across
traditional and alternative asset classes, Nuveen is committed to
delivering consultative guidance that aligns with client needs. Funds
are distributed by Nuveen Securities, LLC, a subsidiary of Nuveen
Investments, Inc. Nuveen is an operating division of TIAA Global Asset
Management. For more information, please visit the Nuveen website at www.nuveen.com.
The information contained on the Nuveen website is not a part of this