| Title: | Market Investing | 
| Moderator: | 2155::michaud | 
| Created: | Thu Jan 23 1992 | 
| Last Modified: | Thu Jun 05 1997 | 
| Last Successful Update: | Fri Jun 06 1997 | 
| Number of topics: | 1060 | 
| Total number of notes: | 10477 | 
    I just found this conference and am in need of some help/direction.  My
    mother (years ago) invested in Nuveen which to my understanding is part
    mutual fund and part trust.  According to her, she was told that
    whatever she paid for her units would eventually be returned plus she
    would receive monthly interest checks.  I know that part of her
    principle has been returned in these monthly checks recently.  However,
    this month the check amount dropped drastically and she is very
    concerned and confused at what is happening.  Her stock broker told her
    that her units are worth very little right now and she should not sale. 
    I would like to be able to understand how Nuveen works so that I can
    help her.  I know nothing about mutual funds/trusts so need a very
    simple explanation to start out. I would appreciate if anyone could
    help me out or perhaps direct me to a publication for beginners.
    
    Thanks,
    
    June 
    
| T.R | Title | User | Personal Name | Date | Lines | 
|---|---|---|---|---|---|
| 661.1 | Like the other side of a mortgage | TLE::JBISHOP | Wed Jan 19 1994 14:47 | 25 | |
|     It's my understanding that Nuveen is essentially a series of bond
    funds.
    
    The simple overview is that a large number of people sent money to
    Nuveen.  The people at Nuveen pooled all this money and used it to
    buy bonds.  As interest on the bonds comes in, it is forwarded on 
    to the owners of the fund.  As the bonds mature, the proceeds are
    used to buy more bonds (they may do trading as well, I don't know).
    
    If the fund stayed open for purchase and sale forever, this'd be
    a bond mutual fund.  If (as I think Nuveen is) it's only open for
    a while, and then has a fixed life, it's a trust of some kind.  I
    think they package it this way to make it look more like a single
    bond, and to allow them to return capital along the way, which
    raises the apparent return.  It's thus something like being on
    the bank side of a mortgage: you get both principal and interest,
    but it all ends after some number of years.
    
    Given the recent drops in interest rates, it's likely that your
    mother is only seeing market reality.  How old are the units?
    If you can look at a few old reports or checks, you might be able
    to figure out both the amount of principal left and the current
    interest rate.
    
    		-John Bishop
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