Is Nuveen ESG Mid-Cap Value ETF (NUMV) a Strong ETF Right Now?
A smart beta exchange traded fund, the Nuveen ESG Mid-Cap Value ETF (NUMV) debuted on 12/13/2016, and offers broad exposure to the Style Box - Mid Cap Value 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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of 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 $316.47 million, this makes it one of the average sized ETFs in the Style Box - Mid Cap Value. NUMV is managed by Nuveen. NUMV seeks to match the performance of the TIAA ESG USA Mid-Cap Value Index before fees and expenses.
The TIAA ESG USA Mid-Cap Value Index comprises of equity securities issued by mid- capitalization companies listed on US exchanges. It uses a rules-based methodology that seeks to provide investment exposure that generally replicates mid-cap value benchmarks through a portfolio of securities that adhere to predetermined ESG, controversial business involvement and low-carbon screening criteria.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.31%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.24%.
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.
Representing 14.70% of the portfolio, the fund has heaviest allocation to the Industrials sector; Financials and Consumer Discretionary round out the top three.
When you look at individual holdings, Vici Properties Inc (VICI) accounts for about 2.34% of the fund's total assets, followed by Oneok Inc (OKE) and Ferguson Plc.
The top 10 holdings account for about 20.58% of total assets under management.
Performance and Risk
The ETF has lost about -3.73% and it's up approximately 1.34% so far this year and in the past one year (as of 09/25/2023), respectively. NUMV has traded between $26.97 and $33.10 during this last 52-week period.
The fund has a beta of 1.09 and standard deviation of 19.39% for the trailing three-year period. With about 89 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Mid-Cap Value ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value 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 $7.11 billion in assets, iShares ESG Aware MSCI USA ETF has $12.20 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 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 Mid-Cap Value ETF (NUMV): ETF Research Reports
ONEOK, Inc. (OKE) : Free Stock Analysis Report
iShares ESG Aware MSCI EAFE ETF (ESGD): ETF Research Reports
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
VICI Properties Inc. (VICI) : Free Stock Analysis Report
