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Is Nuveen ESG Large-Cap Growth ETF (NULG) a Strong ETF Right Now?
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The Nuveen ESG Large-Cap Growth ETF (NULG - 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 - Large 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $1.53 billion, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. NULG is managed by Nuveen. This particular fund seeks to match the performance of the TIAA ESG USA Large-Cap Growth Index before fees and expenses.
The Nuveen ESG USA Large-Cap Growth Index composes of equity securities issued by large capitalization companies listed on U.S. exchanges.
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 this ETF are 0.26%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.35%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 43.30% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 12.77% of the fund's total assets, followed by Nvidia Corp (NVDA - Free Report) and Alphabet Inc - Class A (GOOGL - Free Report) .
Its top 10 holdings account for approximately 52.19% of NULG's total assets under management.
Performance and Risk
Year-to-date, the Nuveen ESG Large-Cap Growth ETF has gained about 21.33% so far, and is up about 38.44% over the last 12 months (as of 11/06/2024). NULG has traded between $61.77 and $85.17 in this past 52-week period.
The ETF has a beta of 1.14 and standard deviation of 22.41% for the trailing three-year period. With about 61 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Large-Cap Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ - Free Report) tracks ----------------------------------------. IShares ESG Aware MSCI USA ETF has $13.52 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $17.94 billion. ESGU has an expense ratio of 0.15% and JEPQ charges 0.35%.
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?
The Nuveen ESG Large-Cap Growth ETF (NULG - 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 - Large 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $1.53 billion, this makes it one of the average sized ETFs in the Style Box - Large Cap Growth. NULG is managed by Nuveen. This particular fund seeks to match the performance of the TIAA ESG USA Large-Cap Growth Index before fees and expenses.
The Nuveen ESG USA Large-Cap Growth Index composes of equity securities issued by large capitalization companies listed on U.S. exchanges.
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 this ETF are 0.26%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.35%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 43.30% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 12.77% of the fund's total assets, followed by Nvidia Corp (NVDA - Free Report) and Alphabet Inc - Class A (GOOGL - Free Report) .
Its top 10 holdings account for approximately 52.19% of NULG's total assets under management.
Performance and Risk
Year-to-date, the Nuveen ESG Large-Cap Growth ETF has gained about 21.33% so far, and is up about 38.44% over the last 12 months (as of 11/06/2024). NULG has traded between $61.77 and $85.17 in this past 52-week period.
The ETF has a beta of 1.14 and standard deviation of 22.41% for the trailing three-year period. With about 61 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Large-Cap Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ - Free Report) tracks ----------------------------------------. IShares ESG Aware MSCI USA ETF has $13.52 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $17.94 billion. ESGU has an expense ratio of 0.15% and JEPQ charges 0.35%.
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.