''Income Stream'' Drives Investor Interest in Closed-End Funds; New Survey Shows Savvy Investors Are More Familiar With CEFs Than ETFs.

CHICAGO -- Closed-end funds (CEFs) are a highly valued, long-term investment choice of sophisticated investors who seek a reliable source of income, according to a new survey commissioned by Nuveen Investments, a leading provider of diversified investment services.

The poll conducted last month by KRC Research found that, despite the attention received by index-based exchange-traded funds (ETFs) in recent years, about one-third of high net-worth investors are familiar with CEFs while only one-fourth are familiar with ETFs. Beyond income stream generation, respondents indicated the most attractive attributes of CEFs are easy access to sophisticated investments and the fact that they're actively managed. A total of nine percent of those polled invested in CEFs versus six percent in ETFs.

The survey of 500 randomly selected individuals with more than $500,000 in non-retirement investment accounts also found a strong correlation between understanding CEFs and investing in them. Nearly half (48%) of those who felt comfortable explaining CEFs invested in them. The poll found CEF investors tended to be more educated, with higher levels of income and investable assets. They also were more likely to use financial advisors and relied on more sources of financial information than ETF investors.

"CEFs have a very strong following among sophisticated, high-net-worth investors," said Anne Kritzmire, Managing Director, Nuveen Investments, and Director of ETFConnect, a comprehensive industry resource on CEF and ETF investing. "At ETFConnect.com we know that most visitors look up CEF information, so we're not entirely surprised that an independent poll found greater awareness with CEFs."

Among the key findings of the survey:

Income, Active Management

Respondents familiar with CEFs were asked to rank various product benefits in order of importance. Thirty percent chose "it can generate an income stream" as most important, while 25% identified "easy access to illiquid asset classes and institutional portfolio strategies." Sixteen percent picked "it can diversify your portfolio."

When the survey asked about the overall attractiveness of CEFs as a category, active management and income again scored high on the list of important features. Seventy-nine percent cited "CEFs are actively managed" and 72% selected "a CEF can generate an income stream" while 71% said "a CEF can provide diversification for your portfolio."

Wealth, Education Factors

Those who were familiar with CEFs and ETFs tended to have higher incomes and more investable assets, and to be more educated. Forty-eight percent of respondents with $2 million or more to invest said that they were familiar with closed-end funds, compared with 27% of those in the $500,000 to $1 million range. Similarly, 37% of those with annual incomes exceeding $150,000 were familiar with CEFs, compared with 29% for those who earned $75,000 or less in a year. Thirty-seven percent of respondents with a graduate degree were familiar with CEFs versus 27% with no degree. Similarly, 27% of respondents with a graduate degree were familiar with ETFs versus 21% with no degree.

Although fewer people invested in CEFs and ETFs than in stocks, bonds, and mutual funds, the chief barrier seemed to be a general lack of understanding. For those familiar with exchange-traded products, the most popular reason for choosing a mutual fund over a CEF was that mutual funds were easier to understand. While there was relatively strong awareness of CEFs and ETFs, only 15% of those surveyed felt comfortable explaining CEFs, compared with 9% for ETFs. Financial advisors appear to play a critical role. Eighty-five percent of CEF investors and 77% of ETF investors said they used a financial advisor.

Broad Satisfaction

Overall, respondents were optimistic about the investment outlook for 2006. The vast majority of investors in mutual funds and exchange-traded products planned to increase or maintain their allocations during the year. Eighty-six percent of ETF investors and 87% of CEF investors said that they would maintain or grow their positions in those investments in 2006, indicating that investors appear to take a buy-and-hold approach to exchange-traded products.

Methodology

The survey was executed by KRC Research to measure investor perceptions of exchange-traded products relative to other investment types. Over a nine-day period in January, 2006, telephone interviews were administered to a geographically diverse sample of 500 randomly selected individuals with investable assets totaling $500,000 or more in separate accounts, money market funds, IRAs, CDs, savings accounts, or other assets, not including real estate or 401(k) plans. Margin of error for the overall sample was +/- 4.4%.

Risk

It is important to note that there are risks inherent in any investment, including the possible loss of principal. Like any stock, the value of an exchange-traded or closed-end fund will fluctuate based on market conditions. There is no assurance that any investment or asset class will provide positive performance or income over any period of time.

Investors should carefully consider a fund's objectives, risks, charges and expenses before investing. For a prospectus containing this and other information, please contact your financial advisor. Read the prospectus carefully before you invest.

About Nuveen Investments

Nuveen Investments provides high-quality investment services designed to help secure the long-term goals of institutions and high-net-worth investors as well as the consultants and financial advisors who serve them. Nuveen Investments markets its highly specialized investment teams, each with its own brand name and area of expertise: NWQ, specializing in value-style equities; Nuveen, managing fixed-income investments; Santa Barbara, committed to growth equities; Rittenhouse, focused on "blue-chip" growth equities; and Symphony, with expertise in alternative investments as well as equity and income portfolios. In total, the Company manages just over $136 billion in assets. Nuveen Investments is listed on The New York Stock Exchange and trades under the symbol "JNC."