NEW YORK (TheStreet) -- Nuveen Asset Management and Incapital on Wednesday launched their Nuveen 2014 Equity Outlook Portfolio of 25 stocks that will aim to outperform the Russell 1000 Index over the 15-month investment horizon of this equity unit trust.
Nuveen Asset Management is serving as the portfolio consultant for the new product, and Incapital is the trust's underwriter and sponsor.
The portfolio's 25, approximately equally weighted large cap stocks from the Russell 1000 Index is based on the investment themes derived from Nuveen chief equity strategist and senior portfolio manager Bob Doll's, CFA, 2014 market predictions. Doll, who's held a similar role at BlackRock, said the risk-reward profile of the names fit comfortably into his quantitative models and fundamental research.
Nuveen has about $118 billion in assets under management.
"In the diversified 100 stock portfolios that I manage in the mutual funds, our goal is about 200, 300 basis points per annum on average," said Doll. "In some years like 2013 we did a lot better, up 800, and in other years we fall short. Over time, it would not be inconsistent to hope for that kind of performance [for the Nuveen 2014 Equity Outlook Portfolio]."
Jason Wilson, Incapital's managing director of product management, says that there isn't a large capital commitment to access this portfolio. The initial investment can be as low as $1,000 at $10 per unit. The anticipated offering period ends on or about April 9, 2014, and the estimated termination date of the trust is April 10, 2015.
"The premise of it is bringing those institutional investment management strategies to retail in a very convenient, liquid and transparent wrapper," said Wilson.
Total assets invested in unit trusts have more than doubled to about $90 billion over the last four years, thanks to their promise of customized diversification at a low cost, according to Wilson.
Here are the 25 stocks that Doll has selected for the Nuveen 2014 Equity Outlook Portfolio, based on his predictions that: 1) the U.S. economy will grow 3% as housing starts surpass one million and private employment hits an all-time high. 2) 10-year Treasury yields will move toward 3.5% as the Federal Reserve completes tapering and holds short-term rate near zero. 3) U.S. equities will record another good year despite enduring a 10% correction. 4) Cyclical stocks will outperform defensive stocks. 5) Dividends, stock buy-backs, capex, and M&A will all increase at a double-digit rate. 6) The U.S. dollar will appreciate as U.S. energy and manufacturing trends continue to improve. 7) Gold will fall for the second year and commodity prices languish. 8) Municipal bonds, led by high yield, will outperform taxable bond counterparts. 9) Active managers will outperform index funds. 10) Republicans will increase their lead in the House but fall short of capturing the Senate.
-- Written by Andrea Tse in New York.
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