The bull market is in the later innings, and active managers must now step up to the plate, Nuveen Asset Management's Bob Doll said Thursday.
"In the early stages of a bull market when breadth is broad and everything goes up, it doesn't matter. You've just got to be there, so passive is fine," Nuveen's chief equity strategist told CNBC's "Squawk Box."
"Later in the bull market, when the market narrows, all of a sudden security selection is critical."
With the easy money in the rear-view window, Doll shared where he is looking for value — and where he is trimming his portfolio.
Nuveen is taking money off the table in the health-care sector and is now essentially neutral weighted, Doll said. Health stocks don't tend to do well in an election year, and share prices are looking a little expensive, he said.
The firm is also trimming back on bank stocks but is sometimes overweight financials, he said.
Doll's portfolios are overweight stocks of tech companies generating cash flow, which he said is king in a slow-growth world. He has also built up telecom positions as a defensive play.
The rest of the portfolio is overweight pieces of the consumer discretionary sector.
Stocks like Home Depot and Lowe's that reap the benefits of existing and new home growth are "a good place to be," Doll said. Target is doing well among a crop of troubled retailers, while international marketing and communications firm Omnicom is a name that makes sense given the strength of the consumer, he said.
Doll said his positions in General Motors and Ford are frustrating because conventional wisdom says investors shouldn't own the auto stocks when price-to-earnings ratios are low. But he said he doesn't' believe they will lose money at the bottom of the cycle this time around.
"Therefore, with their free cash flow, their high dividends — rising dividends — they're fine," he said.