The Nuveen ESG Large-Cap Value ETF (NULV) 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 Value 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.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 $1.77 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the TIAA ESG USA Large-Cap Value Index before fees and expenses.
The Nuveen ESG USA Large-Cap Value 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.26%.
It's 12-month trailing dividend yield comes in at 2.13%.
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.
This ETF has heaviest allocation in the Financials sector - about 23% of the portfolio. Information Technology and Healthcare round out the top three.
When you look at individual holdings, Oracle Corp. (ORCL) accounts for about 2.67% of the fund's total assets, followed by Coca Cola Co. (KO) and International Business Ma (IBM).
Its top 10 holdings account for approximately 20.65% of NULV's total assets under management.
Performance and Risk
The ETF has added about 19.77% so far this year and is up about 23.91% in the last one year (as of 12/03/2024). In the past 52-week period, it has traded between $35.07 and $43.28.
NULV has a beta of 0.93 and standard deviation of 14.73% for the trailing three-year period. With about 107 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Large-Cap Value ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) tracks ----------------------------------------. IShares ESG Aware MSCI USA ETF has $14.47 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $19.45 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 Value.
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.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>Nuveen ESG Large-Cap Value ETF (NULV): ETF Research Reports
International Business Machines Corporation (IBM) : Free Stock Analysis Report
CocaCola Company (The) (KO) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
