Is Nuveen ESG Large-Cap Value ETF (NULV) a Strong ETF Right Now?
Launched on 12/13/2016, the Nuveen ESG Large-Cap Value ETF (NULV) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
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 sponsored by Nuveen. It has amassed assets over $1.50 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the TIAA ESG USA Large-Cap Value Index.
The TIAA ESG USA Large-Cap Value Index comprises of equity securities issued by large capitalization companies listed on US exchanges. It uses a rules-based methodology that seeks to provide investment exposure generally replicating large-cap value benchmarks through a portfolio of securities adhering to predetermined ESG, controversial business involvement & low-carbon criteria.
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.26%.
NULV's 12-month trailing dividend yield is 2.09%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For NULV, it has heaviest allocation in the Financials sector --about 18% of the portfolio --while Healthcare and Information Technology round out the top three.
Taking into account individual holdings, Jpmorgan Chase & Co (JPM) accounts for about 3.48% of the fund's total assets, followed by Unitedhealth Group Inc (UNH) and Merck & Co. Inc. (MRK).
The top 10 holdings account for about 24.81% of total assets under management.
Performance and Risk
The ETF has gained about 1.58% and is up roughly 2.77% so far this year and in the past one year (as of 09/11/2023), respectively. NULV has traded between $30.87 and $36.50 during this last 52-week period.
NULV has a beta of 0.93 and standard deviation of 16.03% for the trailing three-year period. With about 96 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Large-Cap Value ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $7.17 billion in assets, iShares ESG Aware MSCI USA ETF has $12.65 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 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.
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Nuveen ESG Large-Cap Value ETF (NULV): ETF Research Reports
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
iShares ESG Aware MSCI EAFE ETF (ESGD): ETF Research Reports
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
