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Is Nuveen ESG MidCap Value ETF (NUMV) a Strong ETF Right Now?
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Making its debut on 12/13/2016, smart beta exchange traded fund Nuveen ESG MidCap Value ETF (NUMV - Free Report) provides investors broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Nuveen. It has amassed assets over $316.11 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the TIAA ESG USA Mid-Cap Value Index.
The TIAA ESG USA Mid-Cap Value Index comprises of equity securities issued by mid- capitalization companies listed on US exchanges. It uses a rules-based methodology that seeks to provide investment exposure that generally replicates mid-cap value benchmarks through a portfolio of securities that adhere to predetermined ESG, controversial business involvement and low-carbon screening criteria.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.30% for NUMV, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 7.39%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For NUMV, it has heaviest allocation in the Financials sector --about 18.30% of the portfolio --while Real Estate and Industrials round out the top three.
Taking into account individual holdings, Oneok Inc (OKE - Free Report) accounts for about 2.27% of the fund's total assets, followed by Arthur J Gallagher & Co (AJG - Free Report) and Mccormick & Co-Non Vtg Shrs (MKC - Free Report) .
The top 10 holdings account for about 19.94% of total assets under management.
Performance and Risk
Year-to-date, the Nuveen ESG MidCap Value ETF has lost about -10.54% so far, and is down about -5.21% over the last 12 months (as of 05/10/2022). NUMV has traded between $33.10 and $39.58 in this past 52-week period.
The fund has a beta of 1.06 and standard deviation of 26.80% for the trailing three-year period. With about 91 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG MidCap Value ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares ESG Aware MSCI EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $6.72 billion in assets, iShares ESG Aware MSCI USA ETF has $22.65 billion. ESGD has an expense ratio of 0.20% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Nuveen ESG MidCap Value ETF (NUMV) a Strong ETF Right Now?
Making its debut on 12/13/2016, smart beta exchange traded fund Nuveen ESG MidCap Value ETF (NUMV - Free Report) provides investors broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Nuveen. It has amassed assets over $316.11 million, making it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the TIAA ESG USA Mid-Cap Value Index.
The TIAA ESG USA Mid-Cap Value Index comprises of equity securities issued by mid- capitalization companies listed on US exchanges. It uses a rules-based methodology that seeks to provide investment exposure that generally replicates mid-cap value benchmarks through a portfolio of securities that adhere to predetermined ESG, controversial business involvement and low-carbon screening criteria.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.30% for NUMV, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 7.39%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For NUMV, it has heaviest allocation in the Financials sector --about 18.30% of the portfolio --while Real Estate and Industrials round out the top three.
Taking into account individual holdings, Oneok Inc (OKE - Free Report) accounts for about 2.27% of the fund's total assets, followed by Arthur J Gallagher & Co (AJG - Free Report) and Mccormick & Co-Non Vtg Shrs (MKC - Free Report) .
The top 10 holdings account for about 19.94% of total assets under management.
Performance and Risk
Year-to-date, the Nuveen ESG MidCap Value ETF has lost about -10.54% so far, and is down about -5.21% over the last 12 months (as of 05/10/2022). NUMV has traded between $33.10 and $39.58 in this past 52-week period.
The fund has a beta of 1.06 and standard deviation of 26.80% for the trailing three-year period. With about 91 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG MidCap Value ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares ESG Aware MSCI EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $6.72 billion in assets, iShares ESG Aware MSCI USA ETF has $22.65 billion. ESGD has an expense ratio of 0.20% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.