Back to top

Image: Bigstock

Is Nuveen ESG LargeCap Growth ETF (NULG) a Strong ETF Right Now?

Read MoreHide Full Article

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?

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.

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.

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.

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

Because the fund has amassed over $860.83 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. NULG is managed by Nuveen. Before fees and expenses, NULG 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

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.25%, making it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 0.37%.

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.

Representing 41% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Discretionary and Healthcare round out the top three.

Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 11.60% of total assets, followed by Nvidia Corp (NVDA - Free Report) and Home Depot Inc (HD - Free Report) .

The top 10 holdings account for about 36.06% of total assets under management.

Performance and Risk

Year-to-date, the Nuveen ESG LargeCap Growth ETF has gained about 7.04% so far, and is down about -8.92% over the last 12 months (as of 01/26/2023). NULG has traded between $45 and $62.05 in this past 52-week period.

NULG has a beta of 1.10 and standard deviation of 28.47% for the trailing three-year period. With about 76 holdings, it effectively diversifies company-specific risk.


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 $7.24 billion in assets, iShares ESG Aware MSCI USA ETF has $19.77 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.

Published in