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Is Nuveen ESG LargeCap Value ETF (NULV) a Strong ETF Right Now?
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The Nuveen ESG LargeCap Value ETF (NULV - Free Report) was launched on 12/13/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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
The fund is sponsored by Nuveen. It has amassed assets over $1.58 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the TIAA ESG USA Large-Cap Value Index.
The TIAA ESG USA Large-Cap Value Index comprises of equity securities issued by large capitalization companies listed on US exchanges. It uses a rules-based methodology that seeks to provide investment exposure generally replicating large-cap value benchmarks through a portfolio of securities adhering to predetermined ESG, controversial business involvement & low-carbon criteria.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
NULV's 12-month trailing dividend yield is 1.78%.
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.
NULV's heaviest allocation is in the Healthcare sector, which is about 19.10% of the portfolio. Its Financials and Consumer Staples round out the top three.
Taking into account individual holdings, Procter & Gamble Co/the (PG - Free Report) accounts for about 3.13% of the fund's total assets, followed by Coca-Cola Co/the (KO - Free Report) and Pepsico Inc (PEP - Free Report) .
NULV's top 10 holdings account for about 23.18% of its total assets under management.
Performance and Risk
The ETF has lost about -9.05% so far this year and is down about -6.07% in the last one year (as of 11/21/2022). In the past 52-week period, it has traded between $30.87 and $39.75.
NULV has a beta of 0.94 and standard deviation of 23.98% for the trailing three-year period. With about 104 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG LargeCap Value ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value 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 $6.72 billion in assets, iShares ESG Aware MSCI USA ETF has $20.32 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 - Large 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 LargeCap Value ETF (NULV) a Strong ETF Right Now?
The Nuveen ESG LargeCap Value ETF (NULV - Free Report) was launched on 12/13/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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
The fund is sponsored by Nuveen. It has amassed assets over $1.58 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the TIAA ESG USA Large-Cap Value Index.
The TIAA ESG USA Large-Cap Value Index comprises of equity securities issued by large capitalization companies listed on US exchanges. It uses a rules-based methodology that seeks to provide investment exposure generally replicating large-cap value benchmarks through a portfolio of securities adhering to predetermined ESG, controversial business involvement & low-carbon criteria.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
NULV's 12-month trailing dividend yield is 1.78%.
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.
NULV's heaviest allocation is in the Healthcare sector, which is about 19.10% of the portfolio. Its Financials and Consumer Staples round out the top three.
Taking into account individual holdings, Procter & Gamble Co/the (PG - Free Report) accounts for about 3.13% of the fund's total assets, followed by Coca-Cola Co/the (KO - Free Report) and Pepsico Inc (PEP - Free Report) .
NULV's top 10 holdings account for about 23.18% of its total assets under management.
Performance and Risk
The ETF has lost about -9.05% so far this year and is down about -6.07% in the last one year (as of 11/21/2022). In the past 52-week period, it has traded between $30.87 and $39.75.
NULV has a beta of 0.94 and standard deviation of 23.98% for the trailing three-year period. With about 104 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG LargeCap Value ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value 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 $6.72 billion in assets, iShares ESG Aware MSCI USA ETF has $20.32 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 - Large 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.