2014: Condence Begins to Return, Lifting the Economy and Equities

I n V estment P erspecti V es and MarK et O UtlooK JanUarY 2 0 1 4

Ten Predictions

Robert C. Doll, CFA

Chief Equity Strategist, Senior Portfolio Manager
Bob Doll serves as a leading member of the equities investing team for Nuveen Asset Management, providing reasoned analysis through ongoing market commentary and equity portfolio management. Bob manages the Large Cap Equity Series and is co-manager of the Stable Growth strategy.

2013
The Year in Review | Economic improvement and market performance
stayed on track against political and scal forces.
pAGE 3

Scorecard | The predictions with the largest impact on the economy and
markets led the way, while a few missed the mark. of performance.
pAGE 4

By the Numbers | The annual roundup of markets provides a snapshot

pAGE 6

2014
Outlook | The forecast includes moderate economic growth and potential increases in corporate revenues, earnings and reinvestment. pAGE 7 Ten Predictions | Featuring the new list of predictions for the economy
and nancial markets.
pAGE 8

Key Themes for Investors

Plan for the year by evaluating your portfolio in relation to goals such as long-term growth, diverse income sources and risk management. pAGE 11

NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE

As we begin the year, we wanted to share our reections on 2013 as well as important themes we see for 2014.

2013 was a historic and breakout year for global equity markets. Despite ongoing headwinds from slow growth, scal and political
uncertainty and fragile economies around the world, U.S. and non-U.S. markets increased 32% and 22%, respectively.1 U.S. equities hit 45 all-time highs during the year, beating prior bull run periods.2 Europe and Asia struggled with political and nancial turmoil. However, Europes improving GDP in the second half provided promise for exiting recession. In Japan, Abenomics became a positive inuence on the economy as deationary pressures declined. The economy in China started to stabilize from monetary easing and supply side reforms. Federal Reserve (Fed) stimulus continued, although historically low rates began to rise and caused challenges for xed income investors. The tide appears to be turning against xed income markets as the Fed begins reversing its easy money stance now that the economy is meeting the required conditions for GDP growth, job growth and low ination.

2014 should enable U.S. and global economies to ascend after years of sub-par growth. Financial risks are slowly receding, and positive
developments include GDP trends, federal decit decreases, stronger household nances, housing rebound and additional corporate spending. Monetary accommodation remains critical to protecting the nascent trajectory, and better growth will require increases in revenues and earnings, while keeping ination in check. Equities will need to address bubble fears. Although equity markets could be choppy as markets adjust to higher valuations and prepare for Fed tapering, further progress is supported by the potential for business investment and hiring. As a result, investors may be ready to put cash to work. We appreciate your continued support and wish you success and prosperity in the year to come. Best Regards, Follow @BobDollNuveen on Twitter Robert C. Doll, CFA
1 2

 Source: Morningstar Direct, as of 12/31/13. As represented by the S&P 500 Index and the MSCI World ex-U.S. Index. Source: FactSet, as of 12/31/13. 2

thE yEAr in rEViEW

2013

A Memorable Year Finishes Strong

Economic growth was slow but stable during a year in which the federal government shutdown lasted for 16 days and Detroit led for bankruptcy. The

unemployment rate fell to the lowest in ve years, from 7.9% to approximately 7.0%, A signicant U.S. economic headwind was scal tightening through a substantial as a result of modest job growth and declining labor participation (a 35-year low).1

tax increase and spending restraint (sequestration). This may have cost the economy nearly 1.5% growth. An encouraging bipartisan deal helped fund the government through spending reductions. Monetary policy was supportive of global growth. In late spring, the Fed

2013 HiGhLiGhts

J Modest economic improvement J Declining (but still high)

unemployment

contemplated tapering its xed income purchases, causing a 100-basis point rise was softer than expected, equity markets performed well. Emerging markets

in interest rates2 and creating turmoil in India and Brazil. Although global growth experienced weakness in growth, commodity prices, credit and liquidity. Europe began to emerge from recession with reduced tail risks, Japan beneted from despite remaining imbalances. monetary and scal policy stimulus, and China engineered a successful soft landing Our 2013 theme of a muddle-through economy and grind-higher equity market was inuenced by equity valuation (P/E) expansion, perhaps because of reduced 2014 as we move forward with our predictions for the year. uncertainty and rising condence. We see these economic factors continuing into

J Corporate protability J Record equity market gains J Reduced investor uncertainty

And LoWLiGhts

n Muddle-through economy n Political and economic turmoil

in the U.S., Eurozone, Japan and China policy disputes

n Government shutdown and scal n Mediocre revenues and earnings

1 2

 Source: Bureau of Labor Statistics, The Employment Situation November 2013, December 6, 2013. Source: Bloomberg, as of 7/12/13. 3

scorEcArd

2013
We close the year in a similar position as where we started but with forward momentum. Continued headwinds meant an extended muddle-through economy and grind-higher equity market. U.S. political and nancial conict was the lead story, and investor concerns surfaced as interest rates increased substantially for the rst time in years. Leading economic indicators began to turn positive, suggesting U.S. and global growth may improve somewhat.

Overall Scoring

Correct Half Correct Wrong

7 1 (x .5) 2 7.5 / 10

Total

1 2 3 4 5

The U.S. economy continues to muddle through with nominal growth below 5% for the seventh year in a row Europe begins to exit recession by the end of year as the ECB eases and nancial stresses lessen

Real GDP in the U.S. for the third quarter was 2.0% with ination (CPI) at 1.2%, equating to nominal growth of 3.2%.1 The consensus estimate for nal 2013 real GDP is 1.7% with nominal growth of 3.2%.1 A stop/start economy existed throughout the year, with dampening factors such as slow real wage growth, consumer and capital spending weakness, the federal government sequestration and falling ination. During the third quarter, Europe began to emerge from recession. GDP trends were less negative with each consecutive quarter this year.1 For the rst half of the year, Eurozone real GDP was -0.6%, third quarter real GDP was -0.4% and consensus estimates for the fourth quarter were +0.4%.1 The European Central Bank (ECB) eased monetary policy with lower interest rates in early November to further enable the recovery. Financial pressures and credit risks have declined. The U.S. yield curve steepened as nancial system uncertainty declined, the growth outlook improved and the world began slowly healing. Skepticism remained, but global economic conditions were moderately positive. Interest rates uctuated based on Fed announcements, the delay in timing for tapering and the eventual reduction of its asset purchases in December. On December 31, 2012, the yield difference between the 90-day T-bill and the 10-year U.S. Treasury bond was 1.7% (0.1% versus 1.8%). The gap widened to 3.0% (0.0% versus 3.0%) on December 31, 2013.1 U.S. equities increased 32.4% year-to-date and the S&P 500 reached multiple new all-time highs during the year, eclipsing prior bull market run-ups in 2000 and 2007.2 Roughly 475 of the 500 stocks in the S&P recorded advances.3 The P/E ratio continued to rise as has been the case since the end of 2011,2 although earnings growth has been mediocre. Stocks performed well in large part because of injections of central bank liquidity, declining tail risks and a slowly improving economy. Emerging market economies began to perform better in the third quarter and advanced 1.9% during the fourth quarter.2 But emerging markets underperformed overall for the year. The rst half performance slump was based on weakness in global growth and commodities, as well as liquidity issues.

The U.S. yield curve steepens as nancial risks recede and deationary threats lessen

U.S. stocks record a new all-time high as stocks advance for the fth year in a row

Emerging market equities outperform developed market equities

scorEcArd

2013
 Positive trends emerged for GDP growth and labor markets, with healthy corporate and investor balance sheets, while the U.S. government took steps toward resolving budget issues.

6 7 8 9 10

After two years of underperformance, U.S. multinationals outperform domesticallyfocused companies  arge-cap stocks L outperform small-cap stocks and cyclical companies outperform defensive companies

Previously, multinational companies lagged because of concerns in emerging markets and Europe, but this reversed in the third quarter. U.S. multinationals, or U.S. companies in the S&P 500 with the highest percentage of foreign exposure, had the largest improvement in earnings revisions this year. U.S. multinationals gained 30.6% year to date, and U.S. companies with only domestic exposure increased 26.8%.5 Large-cap stocks performed differently this year than we expected. Large-caps trailed for the year and increased 33.1% versus small-caps, which increased 38.8% (as measured by the Russell indices). In part, this is related to the fact that U.S. equities with generally smaller market capitalizations outperformed their non-U.S. counterparts. On the positive side, cyclical sectors have been stronger since the second quarter and increased 34.0% for the year.6 Cyclicals such as industrials and consumer discretionary outperformed, and defensive companies in the telecom and utilities sectors underperformed.7

Dividends increase at a double-digit rate as payout ratios rise

Dividends grew faster than earnings and payout ratios moved up. Dividends increased 10.8% year-over-year. The dividend payout ratio (dened as Dividends/Net Income) increased from 31.9% as of 12/31/12 to 33.0% as of 12/31/13.8 Corporations have been reluctant to reinvest and have been returning dividends to shareholders. But with cash near all-time highs, payout ratios may have additional room to run. The latest U.S. manufacturing gures from the Institute for Supply Management (ISM) rose to 57.3 in November from 56.4 in October, indicating economic activity is strengthening. The U.S. has the benet of cheap natural gas versus big industrial export competitive countries like Japan, Germany and Korea. We believe 2013 was the beginning of positive developments for U.S. manufacturing and energy. The federal government budget decit was $680 billion in scal year 2013, which was $409 billion less than the decit in scal year 2012.9 Progress was based on modest revenue increases, expense cuts from the sequester and acrimony between the two parties in the absence of an agreement until December. We are encouraged by the solid progress that was made with the new budget agreement, which sets spending gures into 2015.

A nascent U.S. manufacturing renaissance continues, fueled by cheap natural gas

The U.S. government passes a $23 trillion ten-year budget deal

 Bloomberg, as of 12/31/13.  Source: Morningstar Direct, as of 12/31/13. 3  Source: FactSet, as of 12/31/13. 4  Source: Morningstar Direct, as of 12/31/13. 5  Source: Bank of America/Merrill Lynch, as of 11/30/13.
1 2

 Source: Bloomberg, Morgan Stanley Cyclicals Index, as of 12/31/13. 7  Source: FactSet, GICS sectors, as of 12/31/13. 8  Source: Bloomberg and Jefferies, 2013 consensus estimates as of 12/31/13. 9  Source: Congressional Budget Ofce, Monthly Budget ReviewSummary for Fiscal Year 2013, November 7, 2013.
6

by thE numbErs

2013
In 2013, continued Fed monetary support bolstered the U.S. economy and political turmoil dominated. Abundant liquidity did not prompt ination or widespread risky bubbles. We began the year with overhang from the scal cli, moved into

sequestration, the government shutdown and nally arrived at a two-year federal in large part to solid but slow earnings growth and strong cash ow yields, U.S. stocks closed the year with strong gains:
AS OF 12/31/13 CLOSING AVERaGE ANNUaL PRICE RETURNS 1

budget deal to outline savings measures and prevent additional scal strife. Thanks

2013 rEcAp
AVERAGE ANNUAL RETURNS

Dow Jones Industrial Average S&P 500 Index

16,577 1,848 4,177

90-Day Treasury Bills 10-Year U.S. Treasury U.S. Equities

0.1% -8.5% 32.4%

Nasdaq Composite

32.4% 40.1%

26.5%

High Yield Corporate Bonds 7.4% Developed Market Equities (Excluding U.S.) 21.6% Emerging Markets -2.3%

Outside of the United States, markets in Europe and Asia began to stabilize. Also, from the Fed and continued policy support. The U.K. market ended up 21.6%.2

the ECB delivered a surprise rate cut in November, signaling both a clear divergence Japan created an aggressive combination of monetary policy along with deliber-

ately lowering its currency, helping to create a shift to a net contributor to global

Source: Morningstar Direct, as of 12/31/13. Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index. 90-Day Treasury Bills: BofAML U.S. Treasury Bill 3 Month Index. 10-Year U.S. Treasury: U.S. Treasury T-Bill Constant Maturity Rate 10 Yr. Index. High Yield Corporate Bonds: Barclays U.S. HY 2% Issuer Capped Index. U.S. Equities: S&P 500 Index. Developed Markets (Excluding U.S.): MSCI World ex U.S. Index. Emerging Markets: MSCI Emerging Markets Index. See page 12 for index denitions.

Emerging markets performance improved and turned slightly positive during the second half of the year but ended -2.3% over the 12 months.2 In bond markets, the Fed experimented with rate increases and tapering. 10-year

GDP. Japanese markets increased 30.5% for the year, and China declined -1.0%.2

Treasury rates ranged from 1.7% to 3.0% over the course of the year.3 The Barclays represented by the 3-Month Treasury Bill) ended 2013 at 0.1%.

U.S. Aggregate Bond Index posted a -2.0% return for the year. Cash investments (as

1 2

 Source: Morningstar Direct, as of 12/31/13. Source: Bloomberg, as of 12/31/13. U.K.: FTSE 100 Index. Japan: Nikkei 225 Index. China: Shanghai Stock Exchange Composite Index. Source: FactSet, as of 12/31/13. 6

outLook

2014

Economic Progress Leads Revenue and Earnings Growth

We expect economic growth will be broader and stronger yet remain moderate for the United States and around the world. Macroeconomic risks are diminishing as economies improve, which may help reduce fear and strengthen condence. U.S. scal drag is lessening, Europe is emerging from recession, Japans deationary

headwinds are diminishing, and China is showing signs of stabilization. Improving to an increase in capital spending and a relatively stronger growth trajectory. This transition to self-sustaining growth should provide the necessary acceleration in revenue and earnings growth.

sentiment for U.S. corporations, along with strengthening consumption, should lead
2014 positiVE siGnALs

J Major economies improving

simultaneously

Fed tapering will likely be slow and incremental, with U.S. and global monetary policy geared toward stimulating growth. As a result, we anticipate the bond market will continue to experience a gradual climb in interest rates. We believe

J U.S. government scal progress J Central bank liquidity J Companies poised to increase
spending

rising bond yields are not a headwind for equities as long as economic conditions continue to improve. Skepticism about the durability of the equity rally exists as high. We do not think these potential headwinds will prevent gains, but instead many argue that stocks have become expensive and prot margins are unsustainably limit them, and perhaps cause volatility. Ination is unlikely to be a problem, and strength and some technical deterioration, but we continue to favor a moderate pro-growth equity posture.

but potEntiAL hEAdWinds

deation is a threat in Europe. Equities are vulnerable to a correction given recent

n Growth not strong yet n Fragile recovery in Europe

and China

n Interest rate increases n Equity valuation increases

The U.S. equity market should continue to grind higher as a result of central bank liquidity, modest economic acceleration, quiet ination and an improving scal situation. We expect the U.S. and global economies to improve in 2014, encouraging acceptable growth in revenue and earnings. The gradual improvement is not likely to threaten the unprecedented global monetary experiment that has helped underpin 2009 and throughout 2013 have reduced our forward view for annual returns to low valuations, economic sensitivity and/or above average secular growth. the rise in equity valuations. Even though equities may still advance, run-ups since mid- to high-single digits. We prefer companies with positive free cash ow proles,

tEn prEdictions

2014
Condence Begins to Return, Lifting the Economy and Equities
Beginning the year without major clouds on the horizon, we are encouraged by a strengthening global economic recovery. Fed tapering represents a belief in stronger economic conditions and a possible source of volatility. Central banks remain committed to monetary reation. We anticipate economic power and nancial wealth will continue to shift from developed countries to emerging markets that we believe now set the pace for global growth.

1 2 3

The U.S. economy grows 3% as housing starts surpass one million and private employment hits an all-time high

After several false starts, the economic recovery that started in mid-2009 will likely show some broader and stronger growth in 2014. Hopeful signs include: housing recovery, falling oil prices, acceptable job growth, easing lending standards, low ination, very high net worth, rising capital expenditures, less scal drag and improving non-U.S. growth. These forces should result in stronger housing starts and an all-time high in private employment. However, obstacles to growth also exist: high levels of uncertainty, continued high unemployment, mediocre real wage growth, a low savings rate, declining renancing and the potential for prolonged deleveraging. We expect the bear market in bonds will continue as interest rates slowly normalize. While the Fed has indicated it will keep policy rates anchored close to zero, the longawaited tapering process should be completed during the year. The ination rate is a big question for the bond market, economy and overall markets. Ination is not likely to rise signicantly, and it could make a bottom by the end of 2014. From a very low level of interest rates, not much capital depreciation in bonds (caused by rising rates) is required to offset coupon earned, with the potential for negative total returns for many parts of the xed income market. After very strong performance in 2013, equities may have already taken 2014 returns. Accordingly, while we think equities can experience further upside, we expect gains to be less ebullient and more volatile. With the signicant rise in valuation levels (P/E ratios) in 2013, we expect that market gains will depend more on earnings growth than further multiple expansion. Expectations of high single digit or low double-digit gains are not unreasonable, but we also think a noticeable pullback is likely to be caused by overbought and deteriorating technical conditions. We would use corrections as buying opportunities since most fundamentals continue to improve.

10-year Treasury yields move toward 3.5% as the Federal Reserve completes tapering and holds short-term rate near zero

U.S. equities record another good year despite enduring a 10% correction

tEn prEdictions

2014
sEiZinG thE opportunitiEs

 Prospects of modest economic improvement, moderate global monetary stimulus and rising corporate sentiment should support growth.

4 5 6 7

Cyclical stocks outperform defensive stocks

After a long run of defensive stock leadership, cyclical stocks asserted themselves in 2013. For earnings and valuation reasons, we expect cyclicals to continue to outperform. Cyclical sectors include consumer discretionary, energy, nancials, industrials, materials and technology. Defensive sectors include consumer staples, healthcare, telecom, and utilities. Stronger U.S. economic growth, a rise in capital expectations and some improvement in non-U.S. economies should also support this conclusion. When analyzing companies, we currently prefer free cash ow yield to dividend yield and dividend growth over dividend yield. Corporations have amassed high levels of cash, with strong cash ow, and may have underleveraged balance sheets along with potential places to use the cash. With reduced uncertainty and improving condence, we anticipate that more cash will be put to work in 2014. As a result, we think dividends, share buy-backs, capital expenditures and mergers and acquisitions will experience noticeable increases. Dividends and buy-backs have been increasing in recent years, but we expect surplus cash to spread to businesses reinvestment (capex) and buying the company down the street. Pent-up demand and aging facilities, equipment and technology also argue for increases in these key areas. Currency direction is one of the most difcult areas in the capital markets to get right. Along with improved and broadened growth, as well as technical support, we believe the developing U.S. energy and manufacturing stories are positive for the dollar. Abundant cheap natural gas and increasing energy production are already providing a positive impact on the U.S. trade decit and promise to enhance U.S. job additions and economic growth. Increasing desire by U.S. and non-U.S. companies to manufacture in the United States for labor, cost, infrastructure and stability reasons has a similar constructive dollar impact. In our opinion, the mystery is not that gold nally came down but rather that it took so long. The preoccupation with gold was originally based on concerns about the viability of the nancial system and ination fears from excess liquidity being pumped into the system. Neither of those circumstances occurred, but gold traded above $1,500 per ounce before falling last year. Now, added headwinds put pressure on golds allure improving global growth, a reduction in systemic threats, some rise in real interest rates and likely dollar improvement. Also, the lack of strong global economic growth and abundant supply for many commodities argues for trendless but relatively volatile commodity prices.

Dividends, stock buy-backs, capex and M&A all increase at a double-digit rate

The U.S. dollar appreciates as U.S. energy and manufacturing trends continue to improve

Gold falls for the second year and commodity prices languish

tEn prEdictions

2014

Municipal bonds, led by high yield, outperform taxable bond counterparts

Municipal bond mutual funds experienced record weeks of outows in 2013. And while municipal fundamentals are arguably mixed, our contention is that the pricing of municipal relative to taxable xed income securities more than take that into account. Rising interest rates (prediction #2) create a headwind for xed income, but we believe the tax-exempt market (especially high yield) is positioned for outperformance. The difculties in Detroit and Puerto Rico have created an interesting opportunity for municipal bond investors. We believe the fall of 2013 was a turning point for state and local governments as politicians and unions began to agree to certain reduced pension benets. Government receipt and outlay patterns also improved. Recent years have been disappointing for active managers abilities to outperform benchmarks. With the broadening of the equity market and the reduction of correlations, the ability of active managers to outperform may increase. Whether or not the number of managers outperforming crosses 50% is debatable, but support for that outcome seems to be increasing. As cheap stocks outperform expensive ones and companies with improving fundamentals outperform companies with deteriorating fundamentals, active managers have a better chance to outperform. A reduction in the number of active players may also reduce the competitive landscape somewhat. Washington, D.C., was front and center in 2013 with mixed consequences. We believe a dovish Fed and declining federal budget decit make the Washington backdrop at worst benign and more likely constructive for investors. The small ball deal between Democrat Patty Murray and Republican Paul Ryan will likely reduce the negative focus on scal policy. The November mid-term elections will soon dominate, with the likelihood of Republicans slightly increasing their lead in the House of Representatives, and increasing representation but failing to control the Senate. Other key issues may include the improved economic outlook, scal restraint, Obamacare and the loss of global prestige.

9 10

Active managers outperform index funds

Republicans increase their lead in the House but fall short of capturing the Senate

AssEssinG thE risks

 Sustainable equity appreciation will require stronger economic growth and a subsequent increase in corporate earnings.

10

kEy thEmEs for inVEstors

2014

Matching Goals to Investments

Early in the year is often the time to review investment goals and adjust asset allocation decisions with your nancial advisor. Consider the following areas as you assess your portfolio.
3A  ctively pursue equities: The equity bull market remains intact but could show future signs of slowing. We believe investors seeking long-term capital appreciation should make strategic equity investments part of an overall diversied portfolio. Some of the current risks include modest economic growth, the potential for a setback outside the U.S., Fed policy decisions, equity valuations and slower earnings. One way to ease back into equities is through regular, consistent investing, or dollar cost averaging. 3F  ocus on companies with free cash ow: Using free cash ow, companies can raise dividends, buy back shares, invest in their businesses, engage in M&A activity, hire workers or increase capacity. Corporations have record high corporate cash levels and low dividend payout ratios. Companies paying dividends generally exhibit lower price swings during market volatility. Sustainable, increasing dividends can provide income, help hedge against ination and oer potential for price appreciation. Also, corporate sentiment appears to be improving, signaling a potential increase in capital expenditures for reinvestment and growth, supporting appreciation over time. 3 Put long-term growth to work: Historically, growth companies that have consistently and strongly outperformed consensus earnings expectations have enjoyed price appreciation. Many higher growth companies are trading at moderate valuations relative to their growth rates. We believe that stocks with strong, sustainable growth characteristics will be rewarded. In addition, companies that exhibit aboveaverage long-term growth rates should be able to withstand market competition and dynamics to help provide solid performance over time. 3 Recognize credit research as a competitive advantage: As economic growth slowly stabilizes and markets wrestle with changing monetary policy, prudent interest rate risk management and disciplined security selection can provide dierentiation. We believe investors will benet from research-driven security selection across investment grade and high yield corporate bonds, the nancial sector of the investment grade universe, BBB and lower rated municipal bonds, the preferred securities sector and emerging markets corporate bonds. 3 Evaluate the role liquid alternatives can play: For many investors, risk management has replaced relative return as a top priority. Alternative assets such as non-traditional or exible xed income, real assets or real estate can introduce diversied sources of risk, return and income to a portfolio. Alternative strategies such as equity long/short or absolute return have historically had low correlation to long-only, benchmarkoriented stock and bond investments.
Dividend yield is one component of performance and should not be the only consideration for investment. Dividends are not guaranteed and will uctuate. 11

Characteristics we look for when evaluating companies:

Free cash ow can provide  exibility to raise dividends, buy back shares and reinvest in the business

 Low valuations help to properly

address risk/reward trade-offs

 Economic sensitivity and above-

average secular growth may help insulate against market uctuations

What Differentiates Nuveen Investments?

Guiding investors through complex global markets is a privilege as well as a responsibility we share a strong sense of duty as we strive to go beyond the expected.

Industry Leadership Since 1898

John Nuveen built a rm with brick and mortar stabilitya steadfast presence in changing markets.

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Nuveens multi-afliate model delivers excellence across asset classes through focused teams of investment experts.

Deep Commitment to Advisors and Investors

Our goal is simple: to deliver lasting value by aligning outstanding people and relevant insights with each relationship.

Asset Management delivers global multi-asset class solutions 3 Nuveen as one of Nuveen Investments seven independent afliates.
Building upon its leadership in municipal bonds, Nuveen Asset Management manages $118 billion in assets* with diverse investment capabilities:
Municipal and Taxable Fixed Income Fundamental Equities Real Assets, Asset Allocation and Non-Traditional Strategies

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INDEX DEFINITIONS
The Barclays Corporate High Yield 2% Issuer Capped Index tracks the performance of U.S. non-investment-grade bonds and limits each issuer to 2% of the index. The Barclays U.S. Aggregate Bond Index represents securities that are SEC-registered, taxable and dollar denominated. The index covers the U.S. investment grade xed rate bond market, with index components for government and corporate securities, mortgage pass-through securities and asset-backed securities. The BofA Merrill Lynch 3-Month U.S. Treasury Bill Index is an unmanaged index of Treasury securities maturing in 90 days that assumes reinvestment of all income. The FTSE 100 Index is a capitalization-weighted index of the 100 most highly capitalized companies traded on the London Stock Exchange. The MSCI Emerging Markets Index is a free oat-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI World Index ex-U.S. is a free oat-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets minus the United States. The Nikkei 225 Index is a price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange. The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure the performance of the broad domestic economy. The Shanghai Stock Exchange Composite is a capitalization-weighted index that tracks the daily price performance of all A-shares and B-shares listed on the Shanghai Stock Exchange. The U.S. Treasury T-Bill Constant Maturity Rate 10 Yr. Index is published by the Federal Reserve Board based on the average yield of a range of Treasury securities, all adjusted to the equivalent of a 10-year maturity.

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The opinions expressed by the author are for informational purposes only as of the date of writing and may change at any time based on market or other conditions and may not come to pass. These views may differ from other investment professionals at Nuveen Investments and are not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specic legal, investment or tax advice. The information provided does not take into account the specic objectives, nancial situation, or particular needs of any specic person. All investments carry a certain degree of risk and there is no assurance that an investment will provide positive performance over any time period. Past performance is no guarantee of future results. Prices of equity securities may decline signicantly over short or extended periods of time. Typically as interest rates rise, bond prices fall. Credit risk arises from an issuers ability to make interest and principal payments when due, as well as the prices of bonds declining when an issuers credit quality is expected to deteriorate. Investments in below investment grade or high yield securities are subject to liquidity risk and heightened credit risk. Non-U.S. investments involve risks such as currency uctuation, political and economic instability, lack of liquidity and differing legal and accounting standards. These risks are magnied in emerging markets. Nuveen Asset Management, LLC is a registered investment adviser and an afliate of Nuveen Investments, Inc. 2014 Nuveen Investments, Inc. All rights reserved.

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