N-Q 1 d148064dnq.htm DIVERSIFIED REAL ASSET INCOME FUND Diversified Real Asset Income Fund

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-22936

Diversified Real Asset Income Fund

(Exact name of registrant as specified in charter)

    333 West Wacker Drive, Chicago, Illinois 60606    

(Address of principal executive offices) (Zip code)

Kevin J. McCarthy—Vice President and Secretary

    333 West Wacker Drive, Chicago, Illinois 60606    

(Name and address of agent for service)

Registrant’s telephone number, including area code:     312-917-7700    

Date of fiscal year end:       May 31      

Date of reporting period:  February 29, 2016  

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 

 

 

 

 

Item 1. Schedule of Investments

 

 

Diversified Real Asset Income Fund

Portfolio of Investments   February 29, 2016 (Unaudited)

 

Principal
Amount (000)		     Description (1)   Interest
Rate (8)		            Maturity (8)      Value  
 

LONG-TERM INVESTMENTS – 139.9% (97.8% of Total Investments)

  

   
 

WHOLE LOANS – 17.9% (12.5% of Total Investments) (2), (3), (4)

  

   
      Commercial Loans – 13.2% (9.2% of Total Investments)                         
$ 2,235     

150 North Pantano 1, AZ

     4.900%            8/01/19       $ 2,234,690   
  1,364     

Carl’s Jr., Idaho Springs, CO

     4.125%            5/01/23         1,313,542   
  6,896     

Clear Lake Central I, Webster, TX, (5)

     4.925%            9/01/16         3,970,553   
  11,136     

La Cholla Plaza I, Tucson, AZ, (5), (6), (7)

     3.175%            8/01/14         6,127,700   
  3,750     

Magnolia Retail Land, Magnolia, TX, (5)

     6.900%            10/01/16         3,750,000   
  14,000     

NCH Commercial Pool II, Rocky Point,
Mexico, (5), (7)

     11.925%            8/01/14         5,749,800   
  1,859     

Palace Court, Santa Fe, NM, (5)

     4.875%            8/01/16         1,007,531   
  1,228     

Perkins Restaurant, Maple Grove, MN

     6.375%            1/01/18         1,236,429   
  4,523     

RealtiCorp Fund III, Crystal River, FL, (5)

     5.925%            7/01/16         4,522,755   
  3,333     

RL Stowe Portfolio, Belmont, NC and Chattanooga, TN

     3.925%            1/01/20         2,700,414   
  15,000     

Signal Butte, Mesa, AZ, (5), (9)

     4.925%              7/01/17         8,262,500   
  65,324     

Total Commercial Loans

                            40,875,914   
      Multifamily Loans – 4.7% (3.3% of Total Investments)         
  4,924     

NCH Multifamily Pool, Oklahoma City, OK, (5), (7)

     11.925%            8/01/14         33,959   
  4,400     

NCH Multifamily Pool II, Rocky Point Mexico, (5), (7)

     11.925%            8/01/14         4,001,360   
  12,939     

Sapphire Skies I, Cle Elum, WA, (5), (10)

     0.925%              3/01/20         10,542,697   
  22,263     

Total Multifamily Loans

                            14,578,016   
$ 87,587     

Total Whole Loans (cost $85,777,891)

                            55,453,930   
Principal
Amount (000)		     Description (1)   Coupon            Maturity      Value  
 

CORPORATE NOTES – 2.6% (1.8% of Total Investments) (2), (3), (4)

  

   
      Diversified Financial Services – 2.6% (1.8% of Total Investments)                         
$ 8,000     

Stratus III, Stratus Properties Inc., (5)

     7.250%              12/31/16       $ 8,000,000   
 

Total Corporate Notes (cost $8,000,000)

                            8,000,000   
Shares     Description (1)                         Value  
 

COMMON STOCKS – 55.9% (39.1% of Total Investments)

  

   
      Air Freight & Logistics – 1.3% (0.9% of Total Investments)                         
  125,745     

BPost SA, (11)

            $ 3,120,419   
  21,930     

Oesterreichische Post AG, (11)

                            787,075   
 

Total Air Freight & Logistics

                            3,907,494   
      Commercial Services & Supplies – 0.1% (0.1% of Total Investments)                         
  23,242     

Covanta Holding Corporation

                            323,761   

 

Nuveen Investments     1   

Diversified Real Asset Income Fund (continued)

 

Portfolio of Investments   February 29, 2016 (Unaudited)

 

Shares     Description (1)                     Value  
      Diversified Telecommunication Services – 1.5% (1.0% of Total Investments)                     
  2,156,516     

HKBN Limited, (11)

            $ 2,877,647   
  637,294     

Singapore Telecommunications Limited, (11)

                    1,687,992   
 

Total Diversified Telecommunication Services

                    4,565,639   
      Electric Utilities – 8.3% (5.8% of Total Investments)                     
  105,157     

Alupar Investimento SA

              327,343   
  1,721,398     

AusNet Services, (11)

              1,796,092   
  25,640     

Avangrid Inc.

              994,576   
  19,650     

Brookfield Infrastructure Partners LP

              739,823   
  823,812     

Contact Energy Limited, (11)

              2,428,439   
  30,150     

Duke Energy Corporation

              2,239,542   
  27,714     

EDP – Energias de Portugal, S.A.

              85,830   
  58,289     

Endesa S.A, (11), (12)

              1,050,607   
  3,081     

Hafslund ASA, Class B Shares

              22,039   
  2,030,771     

HK Electric Investments Limited, (11)

              1,694,471   
  1,172,890     

Infratil Limited, (11)

              2,400,901   
  84,815     

Power Assets Holdings Limited, (11)

              802,733   
  51,894     

PPL Corporation

              1,815,771   
  97,036     

Scottish and Southern Energy PLC, (11)

              1,858,611   
  53,639     

Southern Company

              2,584,327   
  2,573,744     

Spark Infrastructure Group, (11)

              3,829,241   
  221,310     

Transmissora Alianca de Energia Eletrica SA

                    1,045,498   
 

Total Electric Utilities

                    25,715,844   
      Gas Utilities – 2.3% (1.6% of Total Investments)                     
  10,963     

AmeriGas Partners, LP

              446,962   
  26,774     

Enagas, (11)

              751,545   
  1,127,567     

Snam Rete Gas S.p.A, (11)

                    6,076,465   
 

Total Gas Utilities

                    7,274,972   
      Independent Power & Renewable Electricity Producers – 1.9% (1.3% of Total Investments)            
  14,685     

Brookfield Renewable Energy Partners LP

              384,600   
  58,016     

NextEra Energy Partners LP

              1,504,935   
  14,918     

Pattern Energy Group Inc.

              253,308   
  1,106,763     

Renewables Infrastructure Group Limited

              1,528,125   
  168,453     

Saeta Yield S.A, (11), (12)

              1,441,307   
  77,920     

TransAlta Renewables Inc.

                    647,894   
 

Total Independent Power & Renewable Electricity Producers

                    5,760,169   
      Multi-Utilities – 7.0% (4.9% of Total Investments)                     
  112,597     

CenterPoint Energy, Inc.

              2,097,682   
  1,736,876     

Duet Group, (11)

              2,811,128   
  51,286     

Engie, (11)

              793,722   

 

  2       Nuveen Investments

Shares     Description (1)                     Value  
      Multi-Utilities (continued)                     
  13,756,674     

Keppel Infrastructure Trust, (11)

            $ 4,549,105   
  103,658     

National Grid PLC

              6,974,110   
  786,875     

Redes Energeticas Nacionais SA, (11)

              2,222,410   
  1,042,245     

Vector Limited, (11)

                    2,233,402   
 

Total Multi-Utilities

                    21,681,559   
      Oil, Gas & Consumable Fuels – 2.4% (1.7% of Total Investments)                     
  81,201     

Enbridge Energy Partners LP

              1,346,313   
  59,069     

Enbridge Income Fund Holdings Inc.

              1,260,837   
  168,952     

Enterprise Products Partnership LP

              3,948,408   
  1,278     

TC Pipelines LP

              56,577   
  158,306     

Veresen Inc.

                    930,179   
 

Total Oil, Gas & Consumable Fuels

                    7,542,314   
      Real Estate Investment Trust – 22.6% (15.8% of Total Investments)                     
  498,954     

AEW UK REIT PLC, (11)

              655,358   
  23,864     

Agree Realty Corporation

              884,161   
  7,788     

Apollo Commercial Real Estate Finance, Inc.

              120,325   
  169,175     

Armada Hoffler Properties Inc.

              1,798,330   
  969,504     

Ascendas Real Estate Investment Trust, (11)

              1,668,063   
  81,434     

Blackstone Mortgage Trust Inc., Class A

              2,014,677   
  149,646     

CapitaMall Trust, (11)

              232,887   
  30,738     

Care Capital Properties, Inc.

              814,864   
  87,231     

CareTrust REIT Inc.

              993,561   
  34,464     

Community Healthcare Trust Inc.

              619,318   
  109,084     

Crombie Real Estate Investment Trust

              1,077,940   
  12,049     

Digital Realty Trust Inc.

              952,714   
  77,590     

Easterly Government Properties, Inc.

              1,326,789   
  105,755     

Equity Residential

              7,877,690   
  33,648     

Eurocommercial Properties NV, (11)

              1,408,006   
  61,976     

Fortune REIT, (11)

              65,177   
  2,059,959     

Frasers Centrepoint Trust, (11)

              2,907,952   
  129,389     

Independence Realty Trust

              831,971   
  175,951     

Inland Real Estate Corporation

              1,865,081   
  152,507     

InnVest Real Estate Investment Trust

              561,334   
  1,149,363     

Keppel DC REIT, (11)

              862,353   
  157,043     

Killam Apartment Real Estate I

              1,270,969   
  106,328     

Lexington Corporate Properties Trust

              822,979   
  200,607     

Liberty Property Trust

              5,793,530   
  27,665     

LTC Properties Inc.

              1,229,433   
  2,643,850     

Mapletree Greater China Commercial Trust, (11)

              1,710,195   

 

Nuveen Investments     3   

Diversified Real Asset Income Fund (continued)

 

Portfolio of Investments   February 29, 2016 (Unaudited)

 

Shares     Description (1)                     Value  
      Real Estate Investment Trust (continued)                     
  355,627     

Mapletree Logistics Trust, (11)

            $ 246,464   
  3,288     

Monmouth Real Estate Investment Corporation

              36,431   
  11,352     

National Storage Affiliates Trust

              205,358   
  14,302     

New Senior Investment Group Inc.

              138,586   
  63,332     

Omega Healthcare Investors Inc.

              2,030,424   
  126,117     

OneREIT

              289,892   
  642,569     

Parkway Life Real Estate Investment Trust, (11)

              1,078,083   
  19,045     

Pebblebrook Hotel Trust

              485,076   
  371,420     

Physicians Realty Trust

              6,380,996   
  609,350     

Plaza Retail REIT

              2,094,218   
  191,477     

Pure Industrial Real Estate Trust

              643,917   
  265,954     

Scentre Group, (11)

              826,898   
  41,021     

Smart Real Estate Investment Trust

              975,651   
  141,304     

STAG Industrial Inc.

              2,481,298   
  55,076     

Starwood Property Trust Inc.

              966,033   
  14,964     

STORE Capital Corporation

              361,381   
  77,712     

Sunstone Hotel Investors Inc.

              1,966,114   
  965,567     

TF Administradora Industrial S de RL de CV

              1,608,391   
  250,470     

Tritax Big Box REIT PLC

              456,688   
  18,831     

Universal Health Realty Income Trust

              976,199   
  27,660     

Urstadt Biddle Properties Inc.

              546,838   
  27,216     

Ventas Inc.

              1,515,115   
  22,290     

VEREIT, Inc.

              178,766   
  43,110     

Wereldhave NV, (11)

              2,185,047   
  7,232     

WP GLIMCHER, Inc.

              62,484   
  68,035     

WPT Industrial Real Estate Investment Trust

                    689,875   
 

Total Real Estate Investment Trust

                    69,791,880   
      Road & Rail – 0.2% (0.2% of Total Investments)                     
  162,725     

MTR Corporation, (11)

                    750,158   
      Transportation Infrastructure – 8.0% (5.6% of Total Investments)                     
  1,198,955     

China Merchants Holdings Pacific Limited, (11)

              661,109   
  681,450     

Cosco Pacific Limited, (11)

              713,363   
  6,502,771     

Hopewell Highway Infrastructure Limited, (11)

              3,057,582   
  5,554,578     

Hutchison Port Holdings Trust, (11)

              2,610,068   
  193,099     

Jiangsu Expressway Company Limited, (11)

              226,758   
  217     

Kobenhavns Lufthavne, (11)

              117,080   
  26,792     

Macquarie Infrastructure Corporation

              1,635,652   
  1,051,420     

Sydney Airport, (11)

              4,829,614   
  1,345,431     

Transurban Group, (11)

                    10,877,510   
 

Total Transportation Infrastructure

                    24,728,736   

 

  4       Nuveen Investments

Shares     Description (1)                         Value  
      Water Utilities – 0.3% (0.2% of Total Investments)                         
  654,570     

Inversiones Aguas Metropolitanas SA, (11)

                          $ 968,659   
 

Total Common Stocks (cost $178,054,857)

                            173,011,185   
Shares     Description (1)   Coupon            Ratings (13)      Value  
 

CONVERTIBLE PREFERRED SECURITIES – 6.1% (4.3% of Total Investments)

  

   
      Electric Utilities – 2.3% (1.6% of Total Investments)                         
  44,273     

Exelon Corporation

     6.500%            BBB–       $ 1,963,508   
  83,598     

NextEra Energy Inc.

     6.371%            BBB         4,639,689   
  7,366     

NextEra Energy Inc.

     5.799%              BBB         428,849   
 

Total Electric Utilities

                            7,032,046   
      Gas Utilities – 0.2% (0.2% of Total Investments)                         
  9,673     

Laclede Group, Inc., (11)

     6.750%              N/R         570,707   
      Multi-Utilities – 0.2% (0.1% of Total Investments)                         
  8,317     

Black Hills Corp

     7.750%              N/R         531,955   
      Oil, Gas & Consumable Fuels – 0.2% (0.2% of Total Investments)         
  27,560     

Anadarko Petroleum Corporation

     7.500%              N/R         824,871   
      Real Estate Investment Trust – 3.2% (2.2% of Total Investments)         
  65,693     

Alexandria Real Estate Equities Inc., (11)

     7.000%            Baa3         1,819,900   
  45,883     

American Homes 4 Rent

     5.000%            N/R         1,165,428   
  46,001     

American Tower Corporation

     5.500%            N/R         4,478,197   
  15,639     

Equity Commonwealth

     6.500%            Ba1         379,559   
  1,147     

FelCor Lodging Trust Inc., Series A.

     1.950%            CCC         28,813   
  6,205     

Lexington Corporate Properties Trust, Series B

     6.500%            N/R         292,628   
  27,446     

Ramco-Gershenson Properties Trust

     7.250%              N/R         1,680,791   
 

Total Real Estate Investment Trust

                            9,845,316   
 

Total Convertible Preferred Securities (cost $18,997,516)

               18,804,895   
Shares     Description (1)   Coupon            Ratings (13)      Value  
 

$25 PAR (OR SIMILAR) RETAIL PREFERRED – 30.6% (21.4% of Total Investments)

  

   
      Electric Utilities – 6.4% (4.5% of Total Investments)                         
  11,814     

APT Pipelines Limited

     6.665%            N/R       $ 856,716   
  113,809     

Entergy Arkansas Inc., (11)

     6.450%            BB+         2,884,353   
  59,075     

Entergy Texas Inc.

     5.625%            A–         1,584,392   
  78,424     

Integrys Energy Group Inc., (11)

     6.000%            Baa1         1,999,812   
  31,455     

NextEra Energy Inc.

     5.700%            BBB         797,699   
  45,541     

NextEra Energy Inc.

     5.625%            BBB         1,161,751   
  67,906     

NextEra Energy Inc.

     5.000%            BBB         1,694,255   
  69,663     

Pacific Gas & Electric Corporation

     6.000%            BBB+         2,102,429   
  183,575     

PPL Capital Funding, Inc.

     5.900%            BBB         4,822,515   

 

Nuveen Investments     5   

Diversified Real Asset Income Fund (continued)

 

Portfolio of Investments   February 29, 2016 (Unaudited)

 

Shares     Description (1)   Coupon            Ratings (13)      Value  
      Electric Utilities (continued)                         
  79,209     

SCE Trust I

     5.625%              Baa1       $ 2,015,869   
 

Total Electric Utilities

                            19,919,791   
      Multi-Utilities – 1.4% (1.0% of Total Investments)                         
  73,364     

Dominion Resources Inc.

     6.375%            Baa3         3,559,621   
  25,312     

DTE Energy Company

     5.250%              Baa1         635,584   
 

Total Multi-Utilities

                            4,195,205   
      Oil, Gas & Consumable Fuels – 0.3% (0.2% of Total Investments)         
  7,841     

Kinder Morgan Inc., Delaware

     9.750%            N/R         342,730   
  27,207     

Nustar Logistics Limited Partnership

     7.625%              Ba2         588,215   
 

Total Oil, Gas & Consumable Fuels

                            930,945   
      Real Estate Investment Trust – 22.5% (15.7% of Total Investments)         
  5,585     

American Homes 4 Rent

     5.500%            N/R         141,301   
  37,395     

American Homes 4 Rent

     5.000%            N/R         940,858   
  22,005     

Apartment Investment & Management Company

     6.875%            BB         576,531   
  40,701     

Apollo Commercial Real Estate Finance

     8.625%            N/R         966,649   
  43,439     

Arbor Realty Trust Incorporated

     7.375%            N/R         1,036,455   
  41,748     

CBL & Associates Properties Inc.

     7.375%            BB         985,253   
  146,272     

CBL & Associates Properties Inc.

     6.625%            BB         3,247,238   
  183,565     

Cedar Shopping Centers Inc., Series A

     7.250%            N/R         4,635,016   
  54,915     

Chesapeake Lodging Trust

     7.750%            N/R         1,394,841   
  93,761     

Colony Financial Inc.

     7.125%            N/R         1,866,782   
  34,135     

Colony Financial Inc.

     8.500%            N/R         817,875   
  31,096     

Colony Financial Inc.

     7.500%            N/R         684,734   
  45,183     

Coresite Realty Corporation

     7.250%            N/R         1,173,403   
  32,893     

Corporate Office Properties Trust

     7.375%            BB         839,100   
  30,086     

DDR Corporation

     6.500%            Baa3         784,643   
  133,569     

Digital Realty Trust Inc.

     6.350%            Baa3         3,352,582   
  78,986     

EPR Properties Inc.

     9.000%            BB         2,618,386   
  20,575     

EPR Properties Inc.

     6.625%            Baa3         529,395   
  22,267     

EPR Properties Inc.

     5.750%            BB         556,675   
  25,502     

Equity Commonwealth

     7.250%            Ba1         639,845   
  740     

Equity Lifestyle Properties Inc.

     6.750%            N/R         18,870   
  83,444     

General Growth Properties

     6.375%            N/R         2,148,683   
  89,228     

Gramercy Property Trust

     7.125%            N/R         2,257,468   
  59,769     

Hersha Hospitality Trust

     8.000%            N/R         1,521,719   
  77,069     

Hersha Hospitality Trust

     6.875%            N/R         1,963,718   
  794     

Inland Real Estate Corporation

     8.125%            N/R         20,001   
  124,310     

Inland Real Estate Corporation

     6.950%            N/R         3,112,722   
  78,372     

Investors Real Estate Trust

     7.950%            N/R         2,025,916   

 

  6       Nuveen Investments

Shares     Description (1)   Coupon              Ratings (13)      Value  
      Real Estate Investment Trust (continued)                           
  479     

LaSalle Hotel Properties

     7.500%            N/R       $ 12,143   
  30,200     

LaSalle Hotel Properties

     6.375%            N/R         770,100   
  14,488     

Monmouth Real Estate Investment Corp

     7.875%            N/R         374,225   
  6,703     

Northstar Realty Finance Corporation

     8.875%            N/R         144,249   
  52,269     

Northstar Realty Finance Corporation

     8.750%            N/R         1,081,968   
  144,100     

Pebblebrook Hotel Trust

     6.500%            N/R         3,645,730   
  22,084     

Post Properties, Inc., Series A

     8.500%            Baa3         1,329,457   
  25,599     

Rait Financial Trust

     7.125%            N/R         527,339   
  75,334     

Retail Properties of America

     7.000%            BB         1,969,984   
  1,101     

Sabra Health Care Real Estate Investment Trust

     7.125%            BB–         27,767   
  39,138     

Saul Centers, Inc.

     6.875%            N/R         1,025,416   
  4,492     

STAG Industrial Inc.

     9.000%            BB+         117,017   
  16,726     

Summit Hotel Properties Inc.

     9.250%            N/R         436,381   
  86,309     

Summit Hotel Properties Inc.

     7.875%            N/R         2,187,933   
  106,737     

Summit Hotel Properties Inc.

     7.125%            N/R         2,668,425   
  991     

Sun Communities Inc.

     7.125%            N/R         25,964   
  88,470     

Taubman Centers Incorporated., Series J

     6.500%            N/R         2,295,797   
  71,612     

Taubman Centers Incorporated, Series K

     6.250%            N/R         1,854,751   
  13,319     

Terreno Realty Corporation

     7.750%            BB         349,091   
  58,201     

Urstadt Biddle Properties

     7.125%            N/R         1,513,226   
  114,470     

Urstadt Biddle Properties

     6.750%            N/R         2,995,680   
  6,316     

VEREIT, Inc.

     6.700%            N/R         152,847   
  17,872     

Wells Fargo REIT

     6.375%            BBB+         467,174   
  40,338     

WP GLIMCHER, Inc.

     7.500%            Ba1         1,054,032   
  63,951     

WP GLIMCHER, Inc.

     6.875%                  Ba1         1,580,227   
 

Total Real Estate Investment Trust

                                69,463,582   
 

Total $25 Par (or similar) Retail Preferred (cost $95,373,193)

                                94,509,523   
Principal
Amount (000)		     Description (1)   Coupon      Maturity      Ratings (13)      Value  
 

CONVERTIBLE BONDS – 0.9% (0.6% of Total Investments)

  

   
      Multi-Utilities – 0.5% (0.3% of Total Investments)                           
$ 1,565     

Dominion Resources Inc.

     5.750%         10/01/54         BBB–       $ 1,486,750   
      Oil, Gas & Consumable Fuels – 0.4% (0.3% of Total Investments)         
  2,220     

DCP Midstream LLC, 144A

     5.850%         5/21/43         BB–         1,176,600   
$ 3,785     

Total Convertible Bonds (cost $3,770,629)

                                2,663,350   

 

Nuveen Investments     7   

Diversified Real Asset Income Fund (continued)

 

Portfolio of Investments   February 29, 2016 (Unaudited)

 

Principal
Amount (000) (14)		     Description (1)   Coupon      Maturity      Ratings (13)      Value  
      CORPORATE BONDS – 18.9% (13.2% of Total Investments)         
      Commercial Services & Supplies – 1.9% (1.3% of Total Investments)         
$ 1,255     

ADS Waste Holdings Inc.

     8.250%         10/01/20         CCC+       $ 1,229,900   
  1,280     

Casella Waste Systems Inc.

     7.750%         2/15/19         B         1,257,600   
  2,050     

Covanta Holding Corporation

     5.875%         3/01/24         Ba3         1,763,000   
  465  CAD   

GFL Environmental Corporation, 144A

     7.500%         6/18/18         B         337,666   
  1,135     

GFL Escrow Corp., 144A

     9.875%         2/01/21         B3         1,152,025   
 

Total Commercial Services & Supplies

                                5,740,191   
      Communications Equipment – 0.1% (0.1% of Total Investments)         
  865     

Goodman Networks Inc.

     12.125%         7/01/18         CCC+         255,175   
      Construction & Engineering – 0.4% (0.3% of Total Investments)         
  700     

AECOM Technology Corporation

     5.875%         10/15/24         BB–         696,500   
  6,500  NOK   

VV Holding AS, 144A

     6.360%         7/10/19         N/R         664,802   
 

Total Construction & Engineering

                                1,361,302   
      Consumer Finance – 0.3% (0.2% of Total Investments)         
  885     

Covenant Surgical Partners Inc., 144A

     8.750%         8/01/19         B–         858,450   
      Diversified Telecommunication Services – 1.5% (1.1% of Total Investments)         
  1,695     

CyrusOne LP Finance

     6.375%         11/15/22         B+         1,720,425   
  1,730     

Qualitytech LP/QTS Finance Corp.

     5.875%         8/01/22         BB–         1,751,625   
  1,205     

SBA Communications Corporation

     4.875%         7/15/22         B         1,226,088   
 

Total Diversified Telecommunication Services

                                4,698,138   
      Electric Utilities – 0.6% (0.4% of Total Investments)         
  1,500  EUR   

Energias de Portugal, SA, Reg S

     5.375%         9/16/75         Ba2         1,436,353   
  775     

Intergen NV, 144A

     7.000%         6/30/23         B+         530,875   
 

Total Electric Utilities

                                1,967,228   
      Energy Equipment & Services – 0.7% (0.5% of Total Investments)         
  1,020     

Compressco Partners LP / Compressco Finance Corporation

     7.250%         8/15/22         B2         581,400   
  550     

Exterran Partners LP / EXLP Finance Corporation

     6.000%         10/01/22         B1         360,250   
  1,390  EUR   

Origin Energy Finance Limited, Reg S

     7.875%         6/16/71         BB         1,308,762   
 

Total Energy Equipment & Services

                                2,250,412   
      Gas Utilities – 1.1% (0.8% of Total Investments)                           
  895     

AmeriGas Finance LLC

     7.000%         5/20/22         Ba2         918,494   
  1,345     

Ferrellgas LP

     6.750%         1/15/22         B+         968,400   
  765     

LBC Tank Terminals Holdings Netherlands BV, 144A

     6.875%         5/15/23         B         713,363   
  940     

Suburban Propane Partners LP

     5.750%         3/01/25         BB–         789,600   
 

Total Gas Utilities

                                3,389,857   
      Health Care Equipment & Supplies – 0.2% (0.2% of Total Investments)         
  770     

Tenet Healthcare Corporation

     6.750%         2/01/20         B3         739,200   

 

  8       Nuveen Investments

Principal
Amount (000) (14)		     Description (1)   Coupon      Maturity      Ratings (13)      Value  
      Health Care Providers & Services – 2.4% (1.6% of Total Investments)         
$ 1,120     

Acadia Healthcare

     5.625%         2/15/23         B       $ 1,131,200   
  1,025     

Community Health Systems, Inc.

     6.875%         2/01/22         B+         878,938   
  1,110     

HCA Inc.

     5.375%         2/01/25         BB         1,130,811   
  945     

IASIS Healthcare Capital Corporation

     8.375%         5/15/19         CCC+         897,750   
  1,240     

Kindred Healthcare Inc.

     6.375%         4/15/22         B2         1,013,700   
  1,175     

Lifepoint Health Inc.

     5.875%         12/01/23         Ba2         1,222,000   
  1,115     

Select Medical Corporation

     6.375%         6/01/21         B–         1,003,500   
 

Total Health Care Providers & Services

                                7,277,899   
      Independent Power & Renewable Electricity Producers – 0.3% (0.2% of Total Investments)         
  1,305     

GenOn Energy Inc.

     9.500%         10/15/18         B–         848,250   
      Internet Software & Services – 0.4% (0.3% of Total Investments)         
  1,315     

Equinix Inc.

     5.750%         1/01/25         BB         1,361,025   
      IT Services – 0.4% (0.3% of Total Investments)         
  1,390     

Zayo Group LLC / Zayo Capital Inc.

     6.000%         4/01/23         B–         1,369,150   
      Marine – 0.2% (0.2% of Total Investments)                           
  1,430     

Navios South American Logistics Inc., Finance US Inc., 144A

     7.250%         5/01/22         B2         740,025   
      Media – 0.3% (0.2% of Total Investments)         
  975     

Lamar Media Corporation, 144A

     5.750%         2/01/26         Ba1         1,009,728   
      Multi-Utilities – 1.0% (0.7% of Total Investments)         
  1,505  GBP   

Centrica PLC, Reg S

     5.250%         4/10/75         BBB         1,775,154   
  1,100  GBP   

RWE AG, Reg S

     7.000%         12/31/49         BBB–         1,398,137   
 

Total Multi-Utilities

                                3,173,291   
      Oil, Gas & Consumable Fuels – 2.4% (1.7% of Total Investments)         
  1,415     

Calumet Specialty Products

     7.625%         1/15/22         B         843,694   
  140     

Crestwood Midstream Partners LP

     6.125%         3/01/22         BB–         100,800   
  820     

Energy Transfer Equity LP

     5.500%         6/01/27         BB+         619,100   
  835     

Gibson Energy, 144A

     6.750%         7/15/21         BB         709,750   
  670     

Global Partners LP/GLP Finance

     6.250%         7/15/22         B+         428,800   
  1,100     

Martin Mid-Stream Partners LP Finance

     7.250%         2/15/21         B–         880,000   
  1,205     

NGL Energy Partners LP/Fin Co

     5.125%         7/15/19         BB–         707,938   
  705     

NGL Energy Partners LP/Fin Co

     6.875%         10/15/21         BB–         405,375   
  745     

Northern Tier Energy LLC

     7.125%         11/15/20         BB–         692,850   
  415     

PBF Holding Company LLC

     8.250%         2/15/20         BBB–         415,519   
  1,235     

Rose Rock Midstream LP / Rose Rock Finance Corporation

     5.625%         7/15/22         B1         697,775   
  615     

Sabine Pass Liquefaction LLC

     6.250%         3/15/22         BB+         585,788   
  525     

Summit Midstream Holdings LLC Finance

     7.500%         7/01/21         B         393,750   
 

Total Oil, Gas & Consumable Fuels

                                7,481,139   

 

Nuveen Investments     9   

Diversified Real Asset Income Fund (continued)

 

Portfolio of Investments   February 29, 2016 (Unaudited)

 

Principal
Amount (000) (14)		     Description (1)   Coupon      Maturity      Ratings (13)      Value  
      Real Estate Investment Trust – 2.3% (1.6% of Total Investments)         
$ 110     

Communications Sales & Leasing Inc.

     8.250%         10/15/23         BB       $ 98,175   
  1,145     

Corporate Office Properties LP

     5.000%         7/01/25         BBB–         1,154,916   
  925     

Corrections Corporation of America

     5.000%         10/15/22         Baa3         952,750   
  1,665     

DuPont Fabros Technology LP

     5.625%         6/15/23         Ba1         1,681,650   
  945     

Geo Group Inc.

     5.875%         10/15/24         BB–         928,463   
  1,045     

Omega Healthcare Investors Inc.

     4.500%         4/01/27         BBB–         987,175   
  1,400     

PLA Administradora Industrial, S. de R.L. de C.V., 144A

     5.250%         11/10/22         Baa3         1,274,700   
 

Total Real Estate Investment Trust

                                7,077,829   
      Real Estate Management & Development – 0.8% (0.5% of Total Investments)         
  785     

Hunt Companies Inc., 144A

     9.625%         3/01/21         N/R         698,650   
  1,715     

Kennedy-Wilson Holdings Incorporated

     5.875%         4/01/24         BB–         1,642,113   
 

Total Real Estate Management & Development

                                2,340,763   
      Road & Rail – 0.4% (0.3% of Total Investments)         
  1,255     

Watco Companies LLC Finance, 144A

     6.375%         4/01/23         B         1,185,975   
      Software – 0.4% (0.2% of Total Investments)         
  1,265     

SixSigma Networks Mexico SA de CV, 144A

     8.250%         11/07/21         B+         1,125,850   
      Transportation Infrastructure – 0.2% (0.1% of Total Investments)         
  540     

Aeropuerto Internacional de Tocumen SA

     5.750%         10/09/23         BBB         543,780   
      Wireless Telecommunication Services – 0.6% (0.4% of Total Investments)         
  1,731     

Inmarsat Finance PLC, 144A

     4.875%         5/15/22         BB+         1,696,378   
 

Total Corporate Bonds (cost $66,954,309)

                                58,491,035   
Principal
Amount (000) (14)		     Description (1)   Coupon      Maturity      Ratings (13)      Value  
 

$1,000 PAR (OR SIMILAR) INSTITUTIONAL PREFERRED – 6.3% (4.4% of Total Investments)

  

      Electric Utilities – 3.7% (2.6% of Total Investments)         
$ 2,360     

AES Gener SA, 144A

     8.375%         12/18/73         BB       $ 2,312,800   
  520     

Electricite de France, 144A

     5.625%         N/A (15)         Baa1         458,250   
  605     

Electricite de France, 144A

     5.250%         N/A (15)         Baa1         525,594   
  900  GBP   

Electricite de France S.A, Reg S

     6.000%         N/A (15)         Baa1         1,067,149   
  1,995     

Enel SpA, 144A

     8.750%         9/24/73         BBB–         2,169,563   
  1,070     

FPL Group Capital Inc.

     6.350%         10/01/66         BBB         743,650   
  3,065  GBP   

NGG Finance PLC, Reg S

     5.625%         6/18/73         BBB         4,217,841   
 

Total Electric Utilities

                                11,494,847   
      Energy Equipment & Services – 1.4% (0.9% of Total Investments)                           
  5,115     

Transcanada Trust

     5.625%         5/20/75         BBB         4,206,065   

 

  10       Nuveen Investments

Principal
Amount (000) (14)		     Description (1)   Coupon      Maturity      Ratings (13)      Value  
      Oil, Gas & Consumable Fuels – 0.5% (0.4% of Total Investments)                           
$ 1,730     

Enterprise Products Operating LP

     7.034%         1/15/68         Baa2       $ 1,690,729   
      Water Utilities – 0.7% (0.5% of Total Investments)                           
  1,493  GBP   

Pennon Group PLC, Reg S

     6.750%         N/A (15)         N/R         2,112,085   
 

Total $1,000 Par (or similar) Institutional Preferred (cost $22,258,491)

                                19,503,726   
Shares     Description (1), (16)                           Value  
 

INVESTMENT COMPANIES – 0.7% (0.5% of Total Investments)

  

   
      Diversified Other – 0.3% (0.2% of Total Investments)                           
  642,053     

John Laing Infrastructure Fund

                              $ 1,046,857   
      Real Estate Management & Development- 0.4% (0.3% of Total Investments)         
  869,307     

Starwood European Real Estate Finance Limited

                                1,267,418   
 

Total Investment Companies (cost $2,651,336)

                                2,314,275   
 

Total Long-Term Investments (cost $481,838,222)

  

                        432,751,919   
Principal
Amount (000)		     Description (1)   Coupon      Maturity              Value  
 

SHORT-TERM INVESTMENTS – 3.2% (2.2% of Total Investments)

           
      REPURCHASE AGREEMENTS – 3.2% (2.2% of Total Investments)                           
$ 9,829     

Repurchase Agreement with Fixed Income Clearing Corporation, dated 2/29/16, repurchase price $9,829,353, collateralized by $9,220,000 U.S. Treasury Notes, 3.000%, due 5/15/45, value $10,026,750

     0.030%         3/01/16                $ 9,829,345   
 

Total Short-Term Investments (cost $9,829,345)

  

                        9,829,345   
 

Total Investments (cost $491,667,567) – 143.1%

  

                        442,581,264   
 

Borrowings – (44.1)% (17), (18)

                                (136,300,000 ) 
 

Other Assets Less Liabilities – 1.0% (19)

  

                        2,898,233   
 

Net Assets – 100%

                              $ 309,179,497   

Investments in Derivatives as of February 29, 2016

Futures Contracts outstanding:

 

Description      Contract
Position		      Number of
Contracts		      Contract
Expiration		      Notional
Amount
at Value		      Variation Margin
Receivable/
(Payable)		      Unrealized
Appreciation
(Depreciation)		  

U.S. Treasury 5-Year Note

        Short         (63 )      6/16      $ (7,622,016 )     $ (6,398 )    $ 10,952   

Fair Value Measurements

Fair value is defined as the price that would be received upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The following is a summary of the three-tiered hierarchy of valuation input levels.

 

 

Nuveen Investments     11   

Diversified Real Asset Income Fund (continued)

 

Portfolio of Investments   February 29, 2016 (Unaudited)

 

Level 1 –   Inputs are unadjusted and prices are determined using quoted prices in active markets for identical securities.
Level 2 –   Prices are determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 –   Prices are determined using significant unobservable inputs (including management’s assumptions in determining the fair value of investments).

The inputs or methodologies used for valuing securities are not an indication of the risks associated with investing in those securities. The following is a summary of the Fund’s fair value measurements as of the end of the reporting period:

 

        Level 1      Level 2      Level 3      Total  
Long-Term Investments:              

Whole Loans

      $ —       $ —       $ 55,453,930       $ 55,453,930   

Corporate Notes

        —         —         8,000,000         8,000,000   

Common Stocks

        89,139,489         83,871,696         —         173,011,185   

Convertible Preferred Securities

        16,414,288         2,390,607         —         18,804,895   

$25 Par (or similar) Retail Preferred

        89,625,358         4,884,165         —         94,509,523   

Convertible Bonds

        —         2,663,350         —         2,663,350   

Corporate Bonds

        —         58,491,035         —         58,491,035   

$1,000 Par (or similar) Institutional Preferred

        —         19,503,726         —         19,503,726   

Investment Companies

        2,314,275         —         —         2,314,275   
Short-Term Investments:              

Repurchase Agreements

        —         9,829,345         —         9,829,345   
Investment in Derivatives:              

Futures Contracts*

        10,952         —         —         10,952   
Total      $ 197,504,362       $ 181,633,924       $ 63,453,930       $ 442,592,216   
* Represents net unrealized appreciation (depreciation).

The following is a reconciliation of the Fund’s Level 3 investments held at the beginning and end of the measurement period:

 

       Level 3  
       

Whole loans

     

Corporate Notes

      Total  

Balance at the beginning of period

      $ 76,509,929       $ 14,580,000       $ 91,089,929   

Gains (losses):

           

Net realized gains (losses)

        (6,126,533 )       (549,376 )       (6,675,909 ) 

Change in net unrealized appreciation (depreciation)

        3,896,868         489,376         4,386,244   

Purchases at cost

        55,614         —         55,614   

Sales at proceeds

        (21,808,904 )       (3,738,000 )       (25,546,904 ) 

Net discounts (premiums)

        144,956         —         144,956   

Transfers into

        —         —         —   

Transfers (out of)

        —         —         —   
Balance at the end of period      $ 52,671,930       $ 10,782,000       $ 63,453,930   

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets as of the end of the reporting period, were as follows:

 

        Market Value      Techniques      Unobservable Inputs      Range  

Commercial & Multifamily Whole Loans

      $ 5,284,344         Discounted Cash Flow         Debt Service Coverage Ratio         0.00-1.52   
       9,751,160         Appraisals         N/A         N/A   
       28,903,450         Expected Value         N/A         N/A   

Commercial & Multifamily Whole Loans and Corporate Notes

        18,507,445         Price Ceiling         Cap         100   

Commercial Whole Loans

        1,007,531         Price Floor         (1-Loss Severity )       54.2 % 
Total      $ 63,453,930                              

 

  12       Nuveen Investments

The table below presents the transfers in and out of the three valuation levels for the Fund as of the end of the reporting period when compared to the valuation levels as of the end of the previous fiscal year. Changes in valuation inputs or methodologies may result in transfers into or out of an assigned level within the fair value hierarchy. Transfers in or out of levels are generally due to the availability of publicly available information and to the significance or extent the Adviser determines that the valuation inputs or methodologies may impact the valuation of those securities.

 

       Level 1            Level 2            Level 3  
        Transfers In        (Transfers Out)             Transfers In        (Transfers Out)             Transfers In        (Transfers Out)  

Common Stock

      $ 85,830         $ (18,342,860 )         $ 18,342,860         $ (85,830 )         $   —         $   —   

$25 Par (or similar) Retail Preferred

        —           (1,999,812 )             1,999,812           —               —           —   

Income Tax Information

The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to timing differences in recognizing certain gains and losses on investment transactions. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset value of the Fund.

As of February 29, 2016, the cost of investments (excluding investments in derivatives) was $500,575,541.

Gross unrealized appreciation and gross unrealized depreciation of investments (excluding investments in derivatives) as of February 29, 2016, were as follows:

 

Gross unrealized:           

Appreciation

      $ 9,157,996   

Depreciation

        (67,152,273 ) 
Net unrealized appreciation (depreciation) of investments      $ (57,994,277 ) 

 

Nuveen Investments     13   

Diversified Real Asset Income Fund (continued)

 

Portfolio of Investments   February 29, 2016 (Unaudited)

 

 

For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report which may combine industry sub-classifications into sectors for reporting ease.

 

(1) All percentages shown in the Portfolio of Investments are based on net assets unless otherwise noted.

 

(2) Interest rates on whole loans and corporate notes are the net coupon rates in effect (after reducing the coupon rate by any mortgage servicing fees paid to mortgage servicers) as of the end of the reporting period.

 

(3) Securities purchased as part of a private placement, which have not been registered with U.S. Securities and Exchange Commission under the Securities Act of 1933 and which are considered to be illiquid.

 

(4) Investments valued at fair value using methods determined in good faith by, or at the discretion of, the Board. For fair value measurement disclosure purposes, investments are classified as Level 3 unless otherwise noted.

 

(5) Interest only – Represents securities that entitle holders to receive only interest payments on the mortgage. Principal balance on the loan is due at maturity. The interest rate disclosed represents the net coupon rate in effect as of the end of the reporting period.

 

(6) Variable Rate Security – The rate shown is the net coupon rate in effect as of the end of the reporting period.

 

(7) Loan is currently in default with regards to scheduled interest and/or principal payments.

 

(8) Represents the interest rate, coupon and maturity in effect as of the end of the reporting period.

 

(9) The Fund agreed to accept a lower interest payment and defer receipt of the balance of the interest payment until maturity of the whole loan. As a result, the Fund receives regular interest payments based on an annual rate of 2.443% with the balance of the remaining interest to be paid at maturity.

 

(10) The interest rate will increase to 2.000% on March 1, 2017.

 

(11) For fair value measurement disclosure purposes, investment classified as Level 2.

 

(12) Non-income producing; issuer has not declared a dividend within the past twelve months.

 

(13) Ratings: Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.

 

(14) Principal Amount (000) denominated in U.S. Dollars, unless otherwise noted.

 

(15) Perpetual security. Maturity date is not applicable.

 

(16) A copy of the most recent financial statements for these investment companies can be obtained directly from the Securities and Exchange Commission (“SEC”) on its website at http://www.sec.gov.

 

(17) The Fund segregates 100% of its eligible investments (excluding any investments separately pledged as collateral for specific investments in derivatives) in the Portfolio of Investments as collateral for Borrowings.

 

(18) Borrowings as a percentage of Total Investments is 30.8%.

 

(19) Other assets less liabilities includes the unrealized appreciation (depreciation) of certain over-the-counter derivatives as well as the exchange-cleared and exchange-traded derivatives, when applicable.

 

N/A Not Applicable

 

144A Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers.

 

CAD Canadian Dollar

 

EUR Euro

 

GBP Pound Sterling

 

NOK Norwegian Krone

 

Reg S Regulation S allows U.S. companies to sell securities to persons or entities located outside of the United States without registering those securities with the Securities and Exchange Commission. Specifically, Regulation S provides a safe harbor from the registration requirements of the Securities Act for the offers and sales of securities by both foreign and domestic issuers that are made outside the United States.

 

REIT Real Estate Investment Trust

 

  14       Nuveen Investments

Item 2. Controls and Procedures.

 

  a. The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

  b. There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)), exactly as set forth below: EX-99 CERT Attached hereto.

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant)    Diversified Real Asset Income Fund   
By (Signature and Title)    /s/ Kevin J. McCarthy                                                               
   Kevin J. McCarthy   
   Vice President and Secretary   

Date: April 29, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)    /s/ Gifford R. Zimmerman                                                        
   Gifford R. Zimmerman   
   Chief Administrative Officer (principal executive officer)   
Date: April 29, 2016      
By (Signature and Title)    /s/ Stephen D. Foy                                                                    
   Stephen D. Foy   
   Vice President and Controller (principal financial officer)   
Date: April 29, 2016