Nuveen Mortgage Opportunity Term Fund 2Find Ratings Reports
- Last Ratings Update:06/30/2017
- Price as of 06/30/2017 :$24.58
- Net Assets:$117.61 Million
- Peer Rank:4 of 14
- Investment Rating:B-
We rate Nuveen Mortgage Opportunity Term 2 at B-. Positive factors that influence this rating include a greater than average total return. The fund invests approximately 82% of its assets in bonds and may be considered for investors seeking a General Mortgage strategy.
POSITIVES AND RISKS
Total return ranks above peers over the last three years. The Nuveen Mortgage Opportunity Term 2 has returned an annual rate of 8.41% since inception. More recently, the fund has generated a total return of 8.84% in the last five years, 8.17% in the last three years, and 18.31% in the last year. How does that compare to other equity funds? In the last five years, it has outperformed 61% of them. It has also outpaced 73% of its competitors on a three year basis and 67% of them over the last year for the period ending 6/30/2017. On a year to date basis, JMT has returned 9.17%.
Downside risk has been below average. JMT has a draw down risk of -9.45%, which is the largest price decline experienced over the last three years. This fund has a three year standard deviation of 4.8%. This fund has had very little volatility in its monthly performance over the last 36 months. As of 6/30/2017, the fund was trading at a price of $24.58, which is 0.2% below its 52-week high of $24.62 and 1.9% above its 52-week low of $24.11.
High expense ratio hinders performance. On total assets of $117.61 million, JMT maintains a high expense ratio compared to its General Mortgage peers of 2.67% to cover all operating costs. Brokerage costs for the fund to buy and sell shares are not included in the expense ratio. As JMT is a closed end fund, it has no front end or back end load.
Manager tenure and performance record are net positives. Substandard fund managers tend to be replaced, so a long tenure is usually a good sign that a fund is achieving its objectives. The Nuveen Mortgage Opportunity Term 2 has been managed by Michael F. Garrett for the last 7 years. Over that period, the manager was able to capture more actual gains in excess of the expected return than 92% of other fund managers.