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Is Nuveen ESG SmallCap ETF (NUSC) a Strong ETF Right Now?
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Making its debut on 12/13/2016, smart beta exchange traded fund Nuveen ESG SmallCap ETF (NUSC - Free Report) provides investors broad exposure to the Style Box - Small 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Nuveen, NUSC has amassed assets over $987.61 million, making it one of the larger ETFs in the Style Box - Small Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the TIAA ESG Small-Cap Index.
The TIAA ESG USA Small-Cap Index comprises of equity securities issued by small-capitalization companies listed on US exchanges.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.30%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.07%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For NUSC, it has heaviest allocation in the Industrials sector --about 18.90% of the portfolio --while Consumer Discretionary and Financials round out the top three.
When you look at individual holdings, Toro Co (TTC - Free Report) accounts for about 1.05% of the fund's total assets, followed by Willscot Mobile Mini Holding and Axon Enterprise Inc (AXON - Free Report) .
Its top 10 holdings account for approximately 6.24% of NUSC's total assets under management.
Performance and Risk
So far this year, NUSC has gained about 8.02%, and is down about -2.70% in the last one year (as of 01/26/2023). During this past 52-week period, the fund has traded between $31.50 and $40.97.
NUSC has a beta of 1.12 and standard deviation of 30.56% for the trailing three-year period. With about 568 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG SmallCap ETF is a reasonable option for investors seeking to outperform the Style Box - Small 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 $7.24 billion in assets, iShares ESG Aware MSCI USA ETF has $19.77 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 - Small 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 SmallCap ETF (NUSC) a Strong ETF Right Now?
Making its debut on 12/13/2016, smart beta exchange traded fund Nuveen ESG SmallCap ETF (NUSC - Free Report) provides investors broad exposure to the Style Box - Small 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Nuveen, NUSC has amassed assets over $987.61 million, making it one of the larger ETFs in the Style Box - Small Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the TIAA ESG Small-Cap Index.
The TIAA ESG USA Small-Cap Index comprises of equity securities issued by small-capitalization companies listed on US exchanges.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.30%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.07%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For NUSC, it has heaviest allocation in the Industrials sector --about 18.90% of the portfolio --while Consumer Discretionary and Financials round out the top three.
When you look at individual holdings, Toro Co (TTC - Free Report) accounts for about 1.05% of the fund's total assets, followed by Willscot Mobile Mini Holding and Axon Enterprise Inc (AXON - Free Report) .
Its top 10 holdings account for approximately 6.24% of NUSC's total assets under management.
Performance and Risk
So far this year, NUSC has gained about 8.02%, and is down about -2.70% in the last one year (as of 01/26/2023). During this past 52-week period, the fund has traded between $31.50 and $40.97.
NUSC has a beta of 1.12 and standard deviation of 30.56% for the trailing three-year period. With about 568 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG SmallCap ETF is a reasonable option for investors seeking to outperform the Style Box - Small 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 $7.24 billion in assets, iShares ESG Aware MSCI USA ETF has $19.77 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 - Small 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.