A smart beta exchange traded fund, the Nuveen ESG Emerging Markets Equity ETF (NUEM Quick QuoteNUEM - Free Report) debuted on 06/07/2017, and offers broad exposure to the Broad Emerging Market ETFs category of the market.

What Are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

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.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

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

The fund is sponsored by Nuveen. It has amassed assets over $316.8 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. NUEM seeks to match the performance of the TIAA ESG Emerging Markets Equity Index before fees and expenses.

The Nuveen 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 screen 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.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.36%.

It has a 12-month trailing dividend yield of 1.65%.

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.

Taking into account individual holdings, Taiwan Semiconductor Manuaccounts for about 11.62% of the fund's total assets, followed by China Construction Bank C and Hdfc Bank Ltd (HDFCB).

The top 10 holdings account for about 28.58% of total assets under management.

Performance and Risk

So far this year, NUEM has added roughly 18.26%, and was up about 19.07% in the last one year (as of 08/19/2025). During this past 52-week period, the fund has traded between $25.97 and $34.65.

The ETF has a beta of 0.59 and standard deviation of 19.35% for the trailing three-year period. With about 187 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.

Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX and the iShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. Vanguard ESG U.S. Stock ETF has $11.1 billion in assets, iShares ESG Aware MSCI USA ETF has $14.25 billion. ESGV has an expense ratio of 0.09% and ESGU changes 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.