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Is Nuveen ESG Mid-Cap Growth ETF (NUMG) a Strong ETF Right Now?
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The Nuveen ESG Mid-Cap Growth ETF (NUMG - Free Report) made its debut on 12/13/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Nuveen, NUMG has amassed assets over $340.47 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. NUMG, before fees and expenses, seeks to match the performance of the TIAA ESG USA Mid-Cap Growth Index.
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.
Operating expenses on an annual basis are 0.31% for NUMG, making it on par with most peer products in the space.
NUMG's 12-month trailing dividend yield is 0.18%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 27.50% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Healthcare round out the top three.
Taking into account individual holdings, United Rentals Inc (URI - Free Report) accounts for about 2.79% of the fund's total assets, followed by West Pharmaceutical Services (WST - Free Report) and Tractor Supply Company (TSCO - Free Report) .
The top 10 holdings account for about 26% of total assets under management.
Performance and Risk
The ETF has added about 4.01% and is down about -4.24% so far this year and in the past one year (as of 05/30/2023), respectively. NUMG has traded between $32.21 and $40.71 during this last 52-week period.
The fund has a beta of 1.10 and standard deviation of 25.07% for the trailing three-year period. With about 66 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Mid-Cap Growth ETF is an excellent option for investors seeking to outperform the Style Box - Mid 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 $7.27 billion in assets, iShares ESG Aware MSCI USA ETF has $13.56 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 Mid-Cap Growth ETF (NUMG) a Strong ETF Right Now?
The Nuveen ESG Mid-Cap Growth ETF (NUMG - Free Report) made its debut on 12/13/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Nuveen, NUMG has amassed assets over $340.47 million, making it one of the average sized ETFs in the Style Box - Mid Cap Growth. NUMG, before fees and expenses, seeks to match the performance of the TIAA ESG USA Mid-Cap Growth Index.
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.
Operating expenses on an annual basis are 0.31% for NUMG, making it on par with most peer products in the space.
NUMG's 12-month trailing dividend yield is 0.18%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 27.50% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Healthcare round out the top three.
Taking into account individual holdings, United Rentals Inc (URI - Free Report) accounts for about 2.79% of the fund's total assets, followed by West Pharmaceutical Services (WST - Free Report) and Tractor Supply Company (TSCO - Free Report) .
The top 10 holdings account for about 26% of total assets under management.
Performance and Risk
The ETF has added about 4.01% and is down about -4.24% so far this year and in the past one year (as of 05/30/2023), respectively. NUMG has traded between $32.21 and $40.71 during this last 52-week period.
The fund has a beta of 1.10 and standard deviation of 25.07% for the trailing three-year period. With about 66 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Mid-Cap Growth ETF is an excellent option for investors seeking to outperform the Style Box - Mid 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 $7.27 billion in assets, iShares ESG Aware MSCI USA ETF has $13.56 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.