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Is Nuveen ESG LargeCap Growth ETF (NULG) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Growth category of the market, the Nuveen ESG LargeCap Growth ETF (NULG - Free Report) is a smart beta exchange traded fund launched on 12/13/2016.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Nuveen, NULG has amassed assets over $782.60 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the TIAA ESG USA Large-Cap Growth Index.
The TIAA ESG USA Large-Cap Growth Index is comprised of equity securities of large capitalization companies listed on US exchanges & meet ESG criteria & exhibit overall growth style characteristics based on long-term forward EPS growth rate, short-term forward EPS growth rate, current internal growth rate, long-term historical EPS growth trend & long-term historical sales per share growth trend.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
NULG's 12-month trailing dividend yield is 6.90%.
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.
For NULG, it has heaviest allocation in the Information Technology sector --about 44.10% of the portfolio --while Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 12.49% of total assets, followed by Tesla Inc (TSLA - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 38.78% of total assets under management.
Performance and Risk
The ETF has lost about -26.30% so far this year and is down about -15.72% in the last one year (as of 07/20/2022). In the past 52-week period, it has traded between $46.26 and $74.13.
The fund has a beta of 1.10 and standard deviation of 26.77% for the trailing three-year period. With about 72 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG LargeCap Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Large 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 $6.55 billion in assets, iShares ESG Aware MSCI USA ETF has $22.03 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 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 LargeCap Growth ETF (NULG) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Growth category of the market, the Nuveen ESG LargeCap Growth ETF (NULG - Free Report) is a smart beta exchange traded fund launched on 12/13/2016.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Nuveen, NULG has amassed assets over $782.60 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the TIAA ESG USA Large-Cap Growth Index.
The TIAA ESG USA Large-Cap Growth Index is comprised of equity securities of large capitalization companies listed on US exchanges & meet ESG criteria & exhibit overall growth style characteristics based on long-term forward EPS growth rate, short-term forward EPS growth rate, current internal growth rate, long-term historical EPS growth trend & long-term historical sales per share growth trend.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
NULG's 12-month trailing dividend yield is 6.90%.
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.
For NULG, it has heaviest allocation in the Information Technology sector --about 44.10% of the portfolio --while Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 12.49% of total assets, followed by Tesla Inc (TSLA - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 38.78% of total assets under management.
Performance and Risk
The ETF has lost about -26.30% so far this year and is down about -15.72% in the last one year (as of 07/20/2022). In the past 52-week period, it has traded between $46.26 and $74.13.
The fund has a beta of 1.10 and standard deviation of 26.77% for the trailing three-year period. With about 72 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG LargeCap Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Large 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 $6.55 billion in assets, iShares ESG Aware MSCI USA ETF has $22.03 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 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.