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Is Nuveen ESG International Developed Markets Equity ETF (NUDM) a Strong ETF Right Now?
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The Nuveen ESG International Developed Markets Equity ETF (NUDM - Free Report) made its debut on 06/07/2017, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
NUDM is managed by Nuveen, and this fund has amassed over $332.49 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the TIAA ESG International Developed Markets Equity Index before fees and expenses.
The TIAA ESG International Developed Markets Equity Index uses a rules-based methodology to arrive at a diversified portfolio of equity securities issued by companies located in countries with developed markets, excluding the U.S. and Canada, that adhere to predetermined ESG, controversial business involvement and 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 0.30% for NUDM, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.82%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
When you look at individual holdings, Nestle Sa-Reg /chf/ accounts for about 3.40% of the fund's total assets, followed by Asml Holding Nv /eur/ and Sony Group Corp /jpy/.
Its top 10 holdings account for approximately 14.45% of NUDM's total assets under management.
Performance and Risk
The ETF has added roughly 8.29% and is down about -4.66% so far this year and in the past one year (as of 02/07/2023), respectively. NUDM has traded between $22.23 and $30.49 during this last 52-week period.
The fund has a beta of 0.87 and standard deviation of 23.22% for the trailing three-year period. With about 139 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG International Developed Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs 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 $7.14 billion in assets, iShares ESG Aware MSCI USA ETF has $20.11 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 Broad Developed World ETFs.
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 International Developed Markets Equity ETF (NUDM) a Strong ETF Right Now?
The Nuveen ESG International Developed Markets Equity ETF (NUDM - Free Report) made its debut on 06/07/2017, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
NUDM is managed by Nuveen, and this fund has amassed over $332.49 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the TIAA ESG International Developed Markets Equity Index before fees and expenses.
The TIAA ESG International Developed Markets Equity Index uses a rules-based methodology to arrive at a diversified portfolio of equity securities issued by companies located in countries with developed markets, excluding the U.S. and Canada, that adhere to predetermined ESG, controversial business involvement and 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 0.30% for NUDM, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.82%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
When you look at individual holdings, Nestle Sa-Reg /chf/ accounts for about 3.40% of the fund's total assets, followed by Asml Holding Nv /eur/ and Sony Group Corp /jpy/.
Its top 10 holdings account for approximately 14.45% of NUDM's total assets under management.
Performance and Risk
The ETF has added roughly 8.29% and is down about -4.66% so far this year and in the past one year (as of 02/07/2023), respectively. NUDM has traded between $22.23 and $30.49 during this last 52-week period.
The fund has a beta of 0.87 and standard deviation of 23.22% for the trailing three-year period. With about 139 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG International Developed Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs 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 $7.14 billion in assets, iShares ESG Aware MSCI USA ETF has $20.11 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 Broad Developed World ETFs.
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.