Is Nuveen ESG International Developed Markets Equity ETF (NUDM) a Strong ETF Right Now?
The Nuveen ESG International Developed Markets Equity ETF (NUDM) made its debut on 06/07/2017, and is a smart beta exchange traded fund that provides broad exposure to the World ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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 $364.80 million, making it one of the average sized ETFs in the World ETFs. This particular fund seeks to match the performance of the TIAA ESG International Developed Markets Equity Index before fees and expenses.
The TIAA ESG International Developed Markets Equity Index uses a rules-based methodology to arrive at a diversified portfolio of equity securities issued by companies located in countries with developed markets, excluding the U.S. and Canada, that adhere to predetermined ESG, controversial business involvement and low-carbon criteria.
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 NUDM are 0.31%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.79%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Nestle Sa-Reg /chf/ accounts for about 3.23% of total assets, followed by Asml Holding Nv /eur/ and Siemens Ag-Reg /eur/ (SIE).
NUDM's top 10 holdings account for about 16.62% of its total assets under management.
Performance and Risk
Year-to-date, the Nuveen ESG International Developed Markets Equity ETF return is roughly 10.19% so far, and it's up approximately 15.62% over the last 12 months (as of 08/30/2023). NUDM has traded between $22.23 and $29.66 in this past 52-week period.
The ETF has a beta of 0.87 and standard deviation of 17.29% for the trailing three-year period. With about 161 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG International Developed Markets Equity ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI EAFE ETF (ESGD) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $7.31 billion in assets, iShares ESG Aware MSCI USA ETF has $12.80 billion. ESGD has an expense ratio of 0.20% 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 World 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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Nuveen ESG International Developed Markets Equity ETF (NUDM): ETF Research Reports
iShares ESG Aware MSCI EAFE ETF (ESGD): ETF Research Reports
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
