Nuveen Municipal Credit Income Fund

The fixed share count allows the managers to invest in illiquid, higher-yielding municipal credits — such as unrated bonds and tobacco settlement debt — without holding cash to meet redemptions. The fund can also use structural leverage through tender option bonds and inverse floaters. This structure amplifies income for shareholders but also magnifies net-asset-value volatility during credit events.

The portfolio spans high-yield and unrated municipal bonds across sectors including healthcare, transportation, education, and utilities. Its geographic exposure concentrates in California, Illinois, Texas, and New York. Holdings include Puerto Rico sales-tax bonds and tobacco settlement revenue bonds, which carry above-average yields and credit complexity compared with investment-grade muni benchmarks.

As of early 2026, the fund employed leverage of approximately 40% of managed assets via tender option bonds and inverse floating-rate securities. This increases the distribution rate for shareholders but also amplifies losses when bond prices decline. Rising short-term borrowing costs can compress net income if the yield curve flattens, a risk material to leveraged municipal funds.

The board has periodically authorized share repurchase programs when the fund's discount to net asset value widens significantly. These repurchases are discretionary and designed to narrow the discount, though they do not guarantee any specific discount range. The discount reflects retail investor sentiment toward municipal closed-end funds and broader rate expectations.

NZF reported an expense ratio of 1.06% before leverage costs in its most recent semiannual report, which is typically higher than the expense ratios of open-end high-yield municipal mutual funds. The fund's total expense ratio including leverage costs is higher, reflecting the interest expense on its tender option bond programs. Investors comparing NZF to open-end alternatives should consider the impact of structural leverage on both yield and total expense ratios.

NZF seeks to distribute income that is exempt from regular federal income tax. Certain portfolio holdings, including private-activity bonds, may be subject to the alternative minimum tax. Investors should consult their tax advisors because state-level taxation depends on their state of residence and the specific bonds held by the fund.

The fund is governed by a board of trustees chaired by Terence J. Toth. Nuveen Asset Management, a subsidiary of TIAA, serves as investment adviser. Nuveen's larger municipal-bond team — which manages over $200 billion in municipal assets — provides credit research and portfolio-management resources to NZF.