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Is Nuveen ESG MidCap Value ETF (NUMV) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Nuveen ESG MidCap Value ETF (NUMV - Free Report) debuted on 12/13/2016, and offers broad exposure to the Style Box - Mid 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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
NUMV is managed by Nuveen, and this fund has amassed over $302.35 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the TIAA ESG USA Mid-Cap Value Index.
The TIAA ESG USA Mid-Cap Value Index comprises of equity securities issued by mid- capitalization companies listed on US exchanges. It uses a rules-based methodology that seeks to provide investment exposure that generally replicates mid-cap value benchmarks through a portfolio of securities that adhere to predetermined ESG, controversial business involvement and low-carbon screening criteria.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.30% for NUMV, making it on par with most peer products in the space.
NUMV's 12-month trailing dividend yield is 7.84%.
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.
For NUMV, it has heaviest allocation in the Financials sector --about 18.30% of the portfolio --while Real Estate and Industrials round out the top three.
Taking into account individual holdings, Oneok Inc (OKE - Free Report) accounts for about 2.27% of the fund's total assets, followed by Arthur J Gallagher & Co (AJG - Free Report) and Mccormick & Co-Non Vtg Shrs (MKC - Free Report) .
Its top 10 holdings account for approximately 19.94% of NUMV's total assets under management.
Performance and Risk
So far this year, NUMV has lost about -15.76%, and is down about -5.71% in the last one year (as of 07/11/2022). During this past 52-week period, the fund has traded between $29.70 and $39.58.
NUMV has a beta of 1.07 and standard deviation of 27.38% for the trailing three-year period. With about 91 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG MidCap Value ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $6.44 billion in assets, iShares ESG Aware MSCI USA ETF has $21.82 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 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 MidCap Value ETF (NUMV) a Strong ETF Right Now?
A smart beta exchange traded fund, the Nuveen ESG MidCap Value ETF (NUMV - Free Report) debuted on 12/13/2016, and offers broad exposure to the Style Box - Mid 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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
NUMV is managed by Nuveen, and this fund has amassed over $302.35 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the TIAA ESG USA Mid-Cap Value Index.
The TIAA ESG USA Mid-Cap Value Index comprises of equity securities issued by mid- capitalization companies listed on US exchanges. It uses a rules-based methodology that seeks to provide investment exposure that generally replicates mid-cap value benchmarks through a portfolio of securities that adhere to predetermined ESG, controversial business involvement and low-carbon screening criteria.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.30% for NUMV, making it on par with most peer products in the space.
NUMV's 12-month trailing dividend yield is 7.84%.
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.
For NUMV, it has heaviest allocation in the Financials sector --about 18.30% of the portfolio --while Real Estate and Industrials round out the top three.
Taking into account individual holdings, Oneok Inc (OKE - Free Report) accounts for about 2.27% of the fund's total assets, followed by Arthur J Gallagher & Co (AJG - Free Report) and Mccormick & Co-Non Vtg Shrs (MKC - Free Report) .
Its top 10 holdings account for approximately 19.94% of NUMV's total assets under management.
Performance and Risk
So far this year, NUMV has lost about -15.76%, and is down about -5.71% in the last one year (as of 07/11/2022). During this past 52-week period, the fund has traded between $29.70 and $39.58.
NUMV has a beta of 1.07 and standard deviation of 27.38% for the trailing three-year period. With about 91 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG MidCap Value ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $6.44 billion in assets, iShares ESG Aware MSCI USA ETF has $21.82 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 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.