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NCAM’s CFD and CTF funds plan ETF conversion


Nuveen Commodities Asset Management has approved a plan to convert the Nuveen Diversified Commodity Fund (CFD) and the Nuveen Long/Short Commodity Total Return Fund (CTF) to open-end exchange-traded funds (ETFs). 

The purpose of the conversion plan is to seek a closer alignment between the funds’ share price and net asset value (NAV). The conversion of the funds to ETFs will be subject to shareholder and regulatory approvals. The funds are not currently, and after the conversion will not be, mutual funds or any other type of investment company within the meaning of the Investment Company Act of 1940.

The funds are currently structured as actively managed closed-end commodity pools. After the conversion, the funds will remain actively managed commodity pools, but they will adopt an open-end ETF structure. Under the ETF structure, investors will continue to be able to buy and sell shares of the funds on the exchange (as part of the conversion plan, the funds intend to apply to list their shares on the NYSE Arca) throughout the day at market price. In addition, the funds will adopt the creation/redemption process commonly employed by ETFs for the purpose of promoting the trading of the funds’ shares at prices equal to or near their NAV, although there can be no assurance that this process will be successful.

The conversion plan is subject to certain conditions, including shareholder and regulatory approvals. A proposal to convert the funds to ETFs will be submitted to a vote at each fund’s next annual meeting of shareholders, expected to be held on or before 31 March, 2015. Prior to its annual meeting, each fund plans to file relevant materials, including a proxy statement relating to the conversion plan, with the Securities and Exchange Commission (SEC). Promptly after filing its definitive proxy statement, each fund will mail the proxy statement and a proxy card to each shareholder entitled to vote at the annual meeting.

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