Nuveen Unveils Closed Equity ETF

April 25, 2005 ( - Nuveen Investments plans for a public offering of a closed-end exchange-traded fund (ETF) utilizing an integrated equity index option strategy based on the S&P 500 and NASDAQ-100 indices.

According to a news release, the new offering, planned for May 2005, is called the Nuveen Equity Premium Advantage Fund. The fund’s primary investment objective is to provide a high level of current income and gains from net index option premiums, and the secondary objective is appreciation consistent with the fund’s strategy and its primary objective.

Nuveen Asset Management will be the fund’s adviser and will be responsible for determining the fund’s overall investment strategy. Portfolio managers from Gateway Investment Advisers, L.P. will manage the fund’s index option strategy and underlying equity portfolio. The fund will be distributed by Nuveen Investments, LLC. The lead manager of the common share underwriting syndicate will be Citigroup Global Markets Inc.

According to the announcement, under normal market circumstances, the fund intends to invest in a diversified equity portfolio that is designed to support the fund’s index option strategy. The fund will invest in an equity portfolio that is designed to substantially replicate the weighted average price movements of a blended index of the S&P 500 Index and the NASDAQ 100 Index. The initial target weighting will be 50% S&P 500 and 50% NASDAQ100.

Over time, these percentage weightings may vary as a result of relative changes in each index. The equity portfolio will seek to generate a dividend yield that is higher than the weighted average dividend yield of the two indices, the news release said.