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Is Nuveen ESG MidCap Growth ETF (NUMG) a Strong ETF Right Now?
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Launched on 12/13/2016, the Nuveen ESG MidCap Growth ETF (NUMG - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of 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
NUMG is managed by Nuveen, and this fund has amassed over $322.60 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Growth. NUMG, before fees and expenses, seeks to match the performance of the TIAA ESG USA Mid-Cap Growth Index.
The TIAA ESG USA Mid-Cap Growth Index comprises of equity securities issued by mid- capitalization companies listed on US exchanges. It uses a rules-based methodology that provides investment exposure that generally replicates that of mid-cap growth benchmarks through a portfolio of securities that adhere to predetermined ESG, controversial business involvement and low-carbon screening criteria.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.30% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 34.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Industrials round out the top three.
Looking at individual holdings, Cadence Design Sys Inc (CDNS - Free Report) accounts for about 3.23% of total assets, followed by Mettler-Toledo International (MTD - Free Report) and Ulta Beauty Inc (ULTA - Free Report) .
The top 10 holdings account for about 25.83% of total assets under management.
Performance and Risk
The ETF has lost about -27.16% so far this year and is down about -25.32% in the last one year (as of 09/21/2022). In the past 52-week period, it has traded between $32.84 and $59.46.
The ETF has a beta of 1.12 and standard deviation of 27.38% for the trailing three-year period. With about 69 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG MidCap Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
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 $6.18 billion in assets, iShares ESG Aware MSCI USA ETF has $21.67 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 Growth.
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 Growth ETF (NUMG) a Strong ETF Right Now?
Launched on 12/13/2016, the Nuveen ESG MidCap Growth ETF (NUMG - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of 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
NUMG is managed by Nuveen, and this fund has amassed over $322.60 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Growth. NUMG, before fees and expenses, seeks to match the performance of the TIAA ESG USA Mid-Cap Growth Index.
The TIAA ESG USA Mid-Cap Growth Index comprises of equity securities issued by mid- capitalization companies listed on US exchanges. It uses a rules-based methodology that provides investment exposure that generally replicates that of mid-cap growth benchmarks through a portfolio of securities that adhere to predetermined ESG, controversial business involvement and low-carbon screening criteria.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.30% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 34.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Industrials round out the top three.
Looking at individual holdings, Cadence Design Sys Inc (CDNS - Free Report) accounts for about 3.23% of total assets, followed by Mettler-Toledo International (MTD - Free Report) and Ulta Beauty Inc (ULTA - Free Report) .
The top 10 holdings account for about 25.83% of total assets under management.
Performance and Risk
The ETF has lost about -27.16% so far this year and is down about -25.32% in the last one year (as of 09/21/2022). In the past 52-week period, it has traded between $32.84 and $59.46.
The ETF has a beta of 1.12 and standard deviation of 27.38% for the trailing three-year period. With about 69 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG MidCap Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
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 $6.18 billion in assets, iShares ESG Aware MSCI USA ETF has $21.67 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 Growth.
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.