Is Nuveen ESG Mid-Cap Growth ETF (NUMG) a Strong ETF Right Now?
Making its debut on 12/13/2016, smart beta exchange traded fund Nuveen ESG Mid-Cap Growth ETF (NUMG) provides investors broad exposure to the Style Box - Mid Cap Growth 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 work great for investors who believe in market efficiency. They provide 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.
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
Because the fund has amassed over $364.87 million, this makes it one of the average sized ETFs in the Style Box - Mid Cap Growth. NUMG is managed by Nuveen. This particular fund seeks to match the performance of the TIAA ESG USA Mid-Cap Growth Index before fees and expenses.
The TIAA ESG USA Mid-Cap Growth Index comprises of equity securities issued by mid- capitalization companies listed on US exchanges. It uses a rules-based methodology that provides investment exposure that generally replicates that of mid-cap growth benchmarks through a portfolio of securities that adhere to predetermined ESG, controversial business involvement and low-carbon screening criteria.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.31% for NUMG, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.17%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 24.60% of the portfolio, the fund has heaviest allocation to the Industrials sector; Information Technology and Healthcare round out the top three.
When you look at individual holdings, Keysight Technologies In (KEYS) accounts for about 2.83% of the fund's total assets, followed by Quanta Services Inc (PWR) and Gartner Inc (IT).
Its top 10 holdings account for approximately 24.76% of NUMG's total assets under management.
Performance and Risk
The ETF has gained about 7.41% so far this year and is down about -2.13% in the last one year (as of 08/25/2023). In the past 52-week period, it has traded between $32.21 and $40.81.
The fund has a beta of 1.10 and standard deviation of 24.62% for the trailing three-year period. With about 63 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Mid-Cap Growth ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Growth 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 $7.09 billion in assets, iShares ESG Aware MSCI USA ETF has $12.48 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 - Mid 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.
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Nuveen ESG Mid-Cap Growth ETF (NUMG): ETF Research Reports
Quanta Services, Inc. (PWR) : Free Stock Analysis Report
Gartner, Inc. (IT) : Free Stock Analysis Report
Keysight Technologies Inc. (KEYS) : Free Stock Analysis Report
iShares ESG Aware MSCI EAFE ETF (ESGD): ETF Research Reports
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
