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Is Nuveen ESG Large-Cap Growth ETF (NULG) a Strong ETF Right Now?
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Making its debut on 12/13/2016, smart beta exchange traded fund Nuveen ESG Large-Cap Growth ETF (NULG - Free Report) provides investors broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.
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 sponsored by Nuveen. It has amassed assets over $906.66 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. 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 NULG are 0.25%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.37%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 38.90% of the portfolio. 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) .
Its top 10 holdings account for approximately 36.06% of NULG's total assets under management.
Performance and Risk
The ETF has added about 9.41% and is down about -11.87% so far this year and in the past one year (as of 03/29/2023), respectively. NULG has traded between $45 and $62.03 during this last 52-week period.
The ETF has a beta of 1.12 and standard deviation of 24.70% for the trailing three-year period. With about 76 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Large-Cap Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth 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 $7.01 billion in assets, iShares ESG Aware MSCI USA ETF has $13.89 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 Large-Cap Growth ETF (NULG) a Strong ETF Right Now?
Making its debut on 12/13/2016, smart beta exchange traded fund Nuveen ESG Large-Cap Growth ETF (NULG - Free Report) provides investors broad exposure to the Style Box - Large Cap Growth category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.
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 sponsored by Nuveen. It has amassed assets over $906.66 million, making it one of the average sized ETFs in the Style Box - Large Cap Growth. 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 NULG are 0.25%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.37%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 38.90% of the portfolio. 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) .
Its top 10 holdings account for approximately 36.06% of NULG's total assets under management.
Performance and Risk
The ETF has added about 9.41% and is down about -11.87% so far this year and in the past one year (as of 03/29/2023), respectively. NULG has traded between $45 and $62.03 during this last 52-week period.
The ETF has a beta of 1.12 and standard deviation of 24.70% for the trailing three-year period. With about 76 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Large-Cap Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Growth 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 $7.01 billion in assets, iShares ESG Aware MSCI USA ETF has $13.89 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.