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Is Nuveen ESG Emerging Markets Equity ETF (NUEM) a Strong ETF Right Now?
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Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the Nuveen ESG Emerging Markets Equity ETF (NUEM - Free Report) is a smart beta exchange traded fund launched on 06/07/2017.
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.
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.
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
The fund is managed by Nuveen. NUEM has been able to amass assets over $223.60 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund, before fees and expenses, seeks to match the performance of the TIAA ESG Emerging Markets Equity Index.
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 this ETF are 0.36%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.46%.
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.
When you look at individual holdings, Taiwan Semiconductor Man /twd/ accounts for about 8% of the fund's total assets, followed by Alibaba Group Holding Lt /hkd/ and Hdfc Bank Limited /inr/.
NUEM's top 10 holdings account for about 24.67% of its total assets under management.
Performance and Risk
So far this year, NUEM has lost about -3.67%, and is down about -5.15% in the last one year (as of 01/31/2024). During this past 52-week period, the fund has traded between $24.95 and $29.01.
NUEM has a beta of 0.75 and standard deviation of 19.28% for the trailing three-year period. With about 266 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 Emerging Market ETFs 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 $9.47 billion in assets, iShares ESG Aware MSCI USA ETF has $13.90 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 Broad Emerging 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?
Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the Nuveen ESG Emerging Markets Equity ETF (NUEM - Free Report) is a smart beta exchange traded fund launched on 06/07/2017.
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.
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.
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
The fund is managed by Nuveen. NUEM has been able to amass assets over $223.60 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund, before fees and expenses, seeks to match the performance of the TIAA ESG Emerging Markets Equity Index.
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 this ETF are 0.36%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.46%.
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.
When you look at individual holdings, Taiwan Semiconductor Man /twd/ accounts for about 8% of the fund's total assets, followed by Alibaba Group Holding Lt /hkd/ and Hdfc Bank Limited /inr/.
NUEM's top 10 holdings account for about 24.67% of its total assets under management.
Performance and Risk
So far this year, NUEM has lost about -3.67%, and is down about -5.15% in the last one year (as of 01/31/2024). During this past 52-week period, the fund has traded between $24.95 and $29.01.
NUEM has a beta of 0.75 and standard deviation of 19.28% for the trailing three-year period. With about 266 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 Emerging Market ETFs 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 $9.47 billion in assets, iShares ESG Aware MSCI USA ETF has $13.90 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 Broad Emerging 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.