| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 47.03 | 152 |
| Intrinsic value (DCF) | 7.10 | -62 |
| Graham-Dodd Method | 4.94 | -74 |
| Graham Formula | 41.51 | 122 |
Nuveen Mortgage and Income Fund (NYSE: JLS) is a closed-end fixed income mutual fund managed by Nuveen Investments, specializing in undervalued mortgage-backed securities (MBS). The fund primarily targets non-agency residential MBS (RMBS) and commercial MBS (CMBS) with high total return potential, focusing on below-investment-grade securities. Managed by Nuveen Fund Advisors and Wellington Management, JLS employs a bottom-up credit analysis approach, evaluating loan portfolios, payment structures, and servicer strength to optimize returns. Benchmarking against the Barclays U.S. Aggregate Bond Index, the fund caters to income-seeking investors in the financial services sector. With a market cap of approximately $98.7M, JLS offers a dividend yield of 1.842 per share, appealing to those seeking exposure to niche fixed-income markets. Its strategy capitalizes on dislocations in the MBS market, providing diversification within asset management.
Nuveen Mortgage and Income Fund (JLS) presents a niche opportunity for investors targeting high-yield, non-agency MBS exposure. The fund’s focus on undervalued RMBS and CMBS with rigorous credit analysis may offer attractive risk-adjusted returns, supported by a dividend yield of 1.842. However, its below-investment-grade focus introduces credit risk, particularly in volatile rate environments. The fund’s low beta (0.34) suggests relative insulation from broad market swings, but liquidity constraints and sector-specific risks (e.g., mortgage defaults) warrant caution. With no leverage (zero debt) and positive operating cash flow ($15.2M), JLS maintains a stable footing, though its small market cap may limit scalability. Suitable for income-focused portfolios with tolerance for illiquidity and credit volatility.
JLS competes in a specialized segment of fixed-income asset management, differentiating itself through active management of non-agency MBS. Its competitive edge lies in Nuveen’s credit research capabilities and Wellington Management’s expertise in structured products. The fund’s bottom-up approach—analyzing loan-level data and security structures—allows it to identify mispriced assets overlooked by passive strategies. However, its narrow focus on below-investment-grade MBS limits diversification compared to broader fixed-income funds. Competitors like PIMCO and BlackRock offer more diversified MBS strategies with greater scale and liquidity. JLS’s performance is highly dependent on housing market stability and prepayment risks, which may lag in rising-rate environments. Its small size ($98.7M AUM) restricts competitive pricing and access to larger deals, putting it at a disadvantage against mega-funds. Nonetheless, its high-touch credit analysis provides alpha potential in dislocated markets.