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Bandwidth: a hot play?
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March 5, 1999: 6:26 p.m. ET
Nuveen & Co. says its bandwidth portfolio is a way to play the Internet
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NEW YORK (CNNfn) - Portfolio manager Nuveen & Co. thinks bandwidth is the next hot frontier in Internet investing.
The Chicago company recently launched what it says is the first 'bandwidth' portfolio of 25 stocks that provides services and technology for high-speed information networks.
"There's a lot of capital flowing into 'information-age' companies," said William Adams, managing director of Nuveen Defined Portfolios. "These are 25 companies that are leading the charge in building the bandwidth for the world economy."
Bandwidth, the amount of data that can be transmitted in a fixed amount of time, seems to be catching more attention on Wall Street these days. More bandwidth allows more high-speed Internet access.
Most recently, chip giant Intel Corp. (INTC) announced it would buy Level One Communications (LEVL) for $2.2 billion. Level One makes high-speed chips with communication features for network equipment manufacturers.
Last spring, computer giant Dell Computer (DELL) and Cisco Systems (CSCO) announced a plan to provide high-speed Internet access on Dell PCs. At the time, Dell CEO Michael Dell called high-speed Internet access a priority.
"Bandwidth is a big growth category," said Adam Schoenfeld, vice president at Jupiter Communications in New York. "It's an important trend that the Internet sector offers some choice and segmentation."
Nuveen wouldn't reveal asset levels in the portfolio and said it is too soon to track returns after its Feb. 10 launch. It also has e-commerce and Internet defined portfolios that it introduced in October.
Nuveen did say, however, that assets in the Internet, e-commerce and bandwidth portfolios total $175 million. Returns on the Internet portfolio are up 90 percent since inception, the company said.
A defined portfolio, also called a unit trust, is a fixed selection of stocks or bonds, according to Nuveen. Once it's created, the stocks don't change until the portfolio matures. You buy shares of the portfolio and take your profits when it matures.
The bandwidth portfolio has a five-year lifetime and has a minimum investment of $1,000, redeemable at any time. Investors interested in putting money in Nuveen's bandwidth fund have to go through their brokers, rather than contact the company directly.
The portfolio stocks include companies in wireless services and satellites; telecommunications equipment and data networking; and telecommunications and Internet services.
Among the big names are Cisco, Lucent Technologies (LU), Motorola (MOT) and AT&T (T).
The portfolio also owns stakes in Comverse Technologies (CMVT), Globalstar Telecommunications (GSTRF) and NTL Inc. (NTLI), among others.
Adams said Lucent is his favorite stock in the portfolio because the company is involved in wireless, hardware, fiber optics and networking.
"There's definite investor hunger for choices in the technology sector," Jupiter's Schoenfeld said about the Nuveen portfolio. "There's a lot of laser-like focus and this will help narrow that interest and make some choices." 
-- by staff writer Martine Costello
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