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Is Nuveen ESG Emerging Markets Equity ETF (NUEM) a Strong ETF Right Now?
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Making its debut on 06/07/2017, smart beta exchange traded fund Nuveen ESG Emerging Markets Equity ETF (NUEM - Free Report) provides investors broad exposure to the Broad Developed Market ETFs 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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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, NUEM has amassed assets over $222.45 million, making it one of the average sized ETFs in the Broad Developed Market ETFs. NUEM seeks to match the performance of the TIAA ESG Emerging Markets Equity Index before fees and expenses.
The TIAA ESG Emerging Markets Equity Index uses a rules-based methodology to arrive at a diversified portfolio of equity securities issued by companies located in countries with emerging markets that adhere to predetermined ESG, controversial business involvement and low-carbon 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.
Annual operating expenses for NUEM are 0.36%, which makes it on par with most peer products in the space.
NUEM's 12-month trailing dividend yield is 1.85%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Taiwan Semiconductor Man /twd/ accounts for about 7.87% of the fund's total assets, followed by Alibaba Group Holding Lt /hkd/ and China Construction Bank- /hkd/.
Its top 10 holdings account for approximately 24.68% of NUEM's total assets under management.
Performance and Risk
So far this year, NUEM return is roughly 2.87%, and is down about -2.62% in the last one year (as of 05/25/2023). During this past 52-week period, the fund has traded between $22.51 and $28.95.
NUEM has a beta of 0.73 and standard deviation of 20.03% for the trailing three-year period. With about 237 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Emerging Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed Market ETFs 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 $7.21 billion in assets, iShares ESG Aware MSCI USA ETF has $13.30 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 Broad Developed Market ETFs.
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 Emerging Markets Equity ETF (NUEM) a Strong ETF Right Now?
Making its debut on 06/07/2017, smart beta exchange traded fund Nuveen ESG Emerging Markets Equity ETF (NUEM - Free Report) provides investors broad exposure to the Broad Developed Market ETFs 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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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, NUEM has amassed assets over $222.45 million, making it one of the average sized ETFs in the Broad Developed Market ETFs. NUEM seeks to match the performance of the TIAA ESG Emerging Markets Equity Index before fees and expenses.
The TIAA ESG Emerging Markets Equity Index uses a rules-based methodology to arrive at a diversified portfolio of equity securities issued by companies located in countries with emerging markets that adhere to predetermined ESG, controversial business involvement and low-carbon 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.
Annual operating expenses for NUEM are 0.36%, which makes it on par with most peer products in the space.
NUEM's 12-month trailing dividend yield is 1.85%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Taiwan Semiconductor Man /twd/ accounts for about 7.87% of the fund's total assets, followed by Alibaba Group Holding Lt /hkd/ and China Construction Bank- /hkd/.
Its top 10 holdings account for approximately 24.68% of NUEM's total assets under management.
Performance and Risk
So far this year, NUEM return is roughly 2.87%, and is down about -2.62% in the last one year (as of 05/25/2023). During this past 52-week period, the fund has traded between $22.51 and $28.95.
NUEM has a beta of 0.73 and standard deviation of 20.03% for the trailing three-year period. With about 237 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Emerging Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed Market ETFs 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 $7.21 billion in assets, iShares ESG Aware MSCI USA ETF has $13.30 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 Broad Developed Market ETFs.
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.