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Is Nuveen ESG MidCap Growth ETF (NUMG) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Mid Cap Growth category of the market, the Nuveen ESG MidCap Growth ETF (NUMG - Free Report) is a smart beta exchange traded fund launched on 12/13/2016.
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.
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.
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.
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
NUMG is managed by Nuveen, and this fund has amassed over $357.68 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Growth. This particular fund seeks to match the performance of the TIAA ESG USA Mid-Cap Growth Index before fees and expenses.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.30%.
NUMG's 12-month trailing dividend yield is 0.17%.
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 NUMG, it has heaviest allocation in the Information Technology sector --about 32.10% of the portfolio --while Healthcare and Industrials round out the top three.
Looking at individual holdings, Mettler-Toledo International (MTD - Free Report) accounts for about 3.08% of total assets, followed by Keysight Technologies In (KEYS - Free Report) and Alnylam Pharmaceuticals Inc (ALNY - Free Report) .
The top 10 holdings account for about 26.06% of total assets under management.
Performance and Risk
Year-to-date, the Nuveen ESG MidCap Growth ETF has gained about 6.96% so far, and is down about -11.05% over the last 12 months (as of 01/25/2023). NUMG has traded between $32.21 and $45.43 in this past 52-week period.
NUMG has a beta of 1.09 and standard deviation of 28.86% for the trailing three-year period. With about 61 holdings, it effectively diversifies company-specific risk.
Alternatives
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 $7.28 billion in assets, iShares ESG Aware MSCI USA ETF has $19.78 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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Is Nuveen ESG MidCap Growth ETF (NUMG) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Mid Cap Growth category of the market, the Nuveen ESG MidCap Growth ETF (NUMG - Free Report) is a smart beta exchange traded fund launched on 12/13/2016.
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.
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.
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.
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
NUMG is managed by Nuveen, and this fund has amassed over $357.68 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Growth. This particular fund seeks to match the performance of the TIAA ESG USA Mid-Cap Growth Index before fees and expenses.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.30%.
NUMG's 12-month trailing dividend yield is 0.17%.
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 NUMG, it has heaviest allocation in the Information Technology sector --about 32.10% of the portfolio --while Healthcare and Industrials round out the top three.
Looking at individual holdings, Mettler-Toledo International (MTD - Free Report) accounts for about 3.08% of total assets, followed by Keysight Technologies In (KEYS - Free Report) and Alnylam Pharmaceuticals Inc (ALNY - Free Report) .
The top 10 holdings account for about 26.06% of total assets under management.
Performance and Risk
Year-to-date, the Nuveen ESG MidCap Growth ETF has gained about 6.96% so far, and is down about -11.05% over the last 12 months (as of 01/25/2023). NUMG has traded between $32.21 and $45.43 in this past 52-week period.
NUMG has a beta of 1.09 and standard deviation of 28.86% for the trailing three-year period. With about 61 holdings, it effectively diversifies company-specific risk.
Alternatives
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 $7.28 billion in assets, iShares ESG Aware MSCI USA ETF has $19.78 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.