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Is Nuveen ESG MidCap Growth ETF (NUMG) a Strong ETF Right Now?

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Making its debut on 12/13/2016, smart beta exchange traded fund Nuveen ESG MidCap Growth ETF (NUMG - Free Report) provides investors broad exposure to the Style Box - Mid Cap Growth category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

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.

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, and has been able to amass over $323.82 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

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 17.44%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Information Technology sector - about 34.10% of the portfolio. Healthcare and Industrials round out the top three.

Looking at individual holdings, Cadence Design Sys Inc (CDNS - Free Report) accounts for about 3.54% of total assets, followed by Cheniere Energy Inc (LNG - Free Report) and Mettler-Toledo International (MTD - Free Report) .

NUMG's top 10 holdings account for about 26.7% of its total assets under management.

Performance and Risk

The ETF has lost about -26.07% so far this year and is down about -15.54% in the last one year (as of 05/17/2022). In the past 52-week period, it has traded between $34.32 and $59.46.

The ETF has a beta of 1.12 and standard deviation of 25.74% for the trailing three-year period. With about 58 holdings, it effectively diversifies company-specific risk.


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 $6.89 billion in assets, iShares ESG Aware MSCI USA ETF has $22.84 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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