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Is Nuveen ESG Small-Cap ETF (NUSC) a Strong ETF Right Now?
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Launched on 12/13/2016, the Nuveen ESG Small-Cap ETF (NUSC - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Growth category of the market.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
The fund is managed by Nuveen, and has been able to amass over $1.05 billion, which makes it one of the larger ETFs in the Style Box - Small Cap Growth. NUSC seeks to match the performance of the TIAA ESG Small-Cap Index before fees and expenses.
The TIAA ESG USA Small-Cap Index comprises of equity securities issued by small-capitalization companies listed on US exchanges.
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.
Annual operating expenses for NUSC are 0.31%, which makes it on par with most peer products in the space.
NUSC's 12-month trailing dividend yield is 1.12%.
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.
NUSC's heaviest allocation is in the Industrials sector, which is about 19% of the portfolio. Its Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Emcor Group Inc (EME - Free Report) accounts for about 1.09% of total assets, followed by Wex Inc (WEX - Free Report) and Service Corp International (SCI - Free Report) .
Its top 10 holdings account for approximately 8.84% of NUSC's total assets under management.
Performance and Risk
The ETF return is roughly 14.70% so far this year and was up about 13.90% in the last one year (as of 12/22/2023). In the past 52-week period, it has traded between $31.77 and $39.11.
The fund has a beta of 1.14 and standard deviation of 22.07% for the trailing three-year period. With about 529 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Small-Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ - Free Report) tracks ---------------------------------------- and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. JPMorgan Nasdaq Equity Premium Income ETF has $8.11 billion in assets, iShares ESG Aware MSCI USA ETF has $13.26 billion. JEPQ has an expense ratio of 0.35% 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 - Small 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 Small-Cap ETF (NUSC) a Strong ETF Right Now?
Launched on 12/13/2016, the Nuveen ESG Small-Cap ETF (NUSC - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Growth category of the market.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
The fund is managed by Nuveen, and has been able to amass over $1.05 billion, which makes it one of the larger ETFs in the Style Box - Small Cap Growth. NUSC seeks to match the performance of the TIAA ESG Small-Cap Index before fees and expenses.
The TIAA ESG USA Small-Cap Index comprises of equity securities issued by small-capitalization companies listed on US exchanges.
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.
Annual operating expenses for NUSC are 0.31%, which makes it on par with most peer products in the space.
NUSC's 12-month trailing dividend yield is 1.12%.
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.
NUSC's heaviest allocation is in the Industrials sector, which is about 19% of the portfolio. Its Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Emcor Group Inc (EME - Free Report) accounts for about 1.09% of total assets, followed by Wex Inc (WEX - Free Report) and Service Corp International (SCI - Free Report) .
Its top 10 holdings account for approximately 8.84% of NUSC's total assets under management.
Performance and Risk
The ETF return is roughly 14.70% so far this year and was up about 13.90% in the last one year (as of 12/22/2023). In the past 52-week period, it has traded between $31.77 and $39.11.
The fund has a beta of 1.14 and standard deviation of 22.07% for the trailing three-year period. With about 529 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Small-Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ - Free Report) tracks ---------------------------------------- and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. JPMorgan Nasdaq Equity Premium Income ETF has $8.11 billion in assets, iShares ESG Aware MSCI USA ETF has $13.26 billion. JEPQ has an expense ratio of 0.35% 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 - Small 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.