Nuveen Mortgage Opportunity Term Fund 2Find Ratings Reports
- Last Ratings Update:02/28/2017
- Price as of 02/28/2017 :$23.54
- Net Assets:$118.28 Million
- Peer Rank:4 of 14
- Investment Rating:C+
We rate Nuveen Mortgage Opportunity Term 2 at C+. Positive factors that influence this rating include a greater than above average total return and low price volatility. 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 7.87% since inception. More recently, the fund has generated a total return of 9.27% in the last five years, 7.31% in the last three years, and 15.79% in the last year. How does that compare to other equity funds? In the last five years, it has outperformed 67% of them. It has also outpaced 64% of its competitors on a three year basis and 51% of them over the last year for the period ending 2/28/2017. On a year to date basis, JMT has returned 2.66%.
Downside risk has been below average. JMT has a draw down risk of -9.49%, which is the largest price decline experienced over the last three years. This fund has a three year standard deviation of 4.7%. This fund has had very little volatility in its monthly performance over the last 36 months. As of 2/28/2017, the fund was trading at a price of $23.54, which is 0.8% below its 52-week high of $23.74 and 1.6% above its 52-week low of $23.16.
High expense ratio hinders performance. On total assets of $118.28 million, JMT maintains a high expense ratio compared to its General Mortgage peers of 2.47% 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 86% of other fund managers.