A smart beta exchange traded fund, the Nuveen ESG Small-Cap ETF (NUSC Quick QuoteNUSC - Free Report) debuted on 12/13/2016, and offers 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.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

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.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

The fund is sponsored by Nuveen. It has amassed assets over $1.18 billion, making it one of the average sized ETFs in the Style Box - Small Cap Growth. This particular fund seeks to match the performance of the TIAA ESG Small-Cap Index before fees and expenses.

The Nuveen ESG USA Small-Cap Index composed of equity securities issued by small-capitalization companies listed on U.S. exchanges.

Cost & Other Expenses

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for NUSC are 0.31%, which makes it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.10%.

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.

NUSC's heaviest allocation is in the Industrials sector, which is about 18.3% of the portfolio. Its Financials and Consumer Discretionary round out the top three.

Taking into account individual holdings, Comfort Systems Usa Inc (FIX) accounts for about 1.48% of the fund's total assets, followed by Technipfmc Plc (FTI) and East West Bancorp Inc (EWBC).

NUSC's top 10 holdings account for about 9.94% of its total assets under management.

Performance and Risk

The ETF return is roughly 3.84% and is up about 9.22% so far this year and in the past one year (as of 09/11/2025), respectively. NUSC has traded between $33.38 and $46.20 during this last 52-week period.

The fund has a beta of 1.08 and standard deviation of 20.74% for the trailing three-year period. With about 453 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.

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 $11.31 billion in assets, iShares ESG Aware MSCI USA ETF has $14.32 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 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.