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Is Nuveen ESG LargeCap Value ETF (NULV) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the Nuveen ESG LargeCap Value ETF (NULV - Free Report) is a smart beta exchange traded fund launched on 12/13/2016.
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 managed by Nuveen. NULV has been able to amass assets over $1.62 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. NULV, 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.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
NULV's 12-month trailing dividend yield is 2.07%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 18.20% of the portfolio, the fund has heaviest allocation to the Financials sector; Healthcare and Consumer Staples round out the top three.
When you look at individual holdings, Merck & Co. Inc. (MRK - Free Report) accounts for about 2.83% of the fund's total assets, followed by Coca-Cola Co/the (KO - Free Report) and Jpmorgan Chase & Co (JPM - Free Report) .
NULV's top 10 holdings account for about 23.07% of its total assets under management.
Performance and Risk
The ETF has added about 2.80% so far this year and is down about -3.78% in the last one year (as of 01/24/2023). In the past 52-week period, it has traded between $30.87 and $38.82.
The ETF has a beta of 0.93 and standard deviation of 24.23% for the trailing three-year period. With about 98 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 $7.28 billion in assets, iShares ESG Aware MSCI USA ETF has $19.78 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?
Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the Nuveen ESG LargeCap Value ETF (NULV - Free Report) is a smart beta exchange traded fund launched on 12/13/2016.
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 managed by Nuveen. NULV has been able to amass assets over $1.62 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. NULV, 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.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
NULV's 12-month trailing dividend yield is 2.07%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 18.20% of the portfolio, the fund has heaviest allocation to the Financials sector; Healthcare and Consumer Staples round out the top three.
When you look at individual holdings, Merck & Co. Inc. (MRK - Free Report) accounts for about 2.83% of the fund's total assets, followed by Coca-Cola Co/the (KO - Free Report) and Jpmorgan Chase & Co (JPM - Free Report) .
NULV's top 10 holdings account for about 23.07% of its total assets under management.
Performance and Risk
The ETF has added about 2.80% so far this year and is down about -3.78% in the last one year (as of 01/24/2023). In the past 52-week period, it has traded between $30.87 and $38.82.
The ETF has a beta of 0.93 and standard deviation of 24.23% for the trailing three-year period. With about 98 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 $7.28 billion in assets, iShares ESG Aware MSCI USA ETF has $19.78 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.