Launched on 12/13/2016, the Nuveen ESG Mid-Cap Value ETF (NUMV) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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
NUMV is managed by Nuveen, and this fund has amassed over $305.55 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Value. NUMV, before fees and expenses, seeks to match the performance of the TIAA ESG USA Mid-Cap Value Index.
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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.30%.
It has a 12-month trailing dividend yield of 2.37%.
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 14.40% of the portfolio. Real Estate and Industrials round out the top three.
Taking into account individual holdings, Vici Properties Inc (VICI) accounts for about 2.44% of the fund's total assets, followed by Oneok Inc (OKE) and Baker Hughes Co (BKR).
The top 10 holdings account for about 21.04% of total assets under management.
Performance and Risk
The ETF has lost about -9.11% so far this year and is down about -19.51% in the last one year (as of 03/20/2023). In the past 52-week period, it has traded between $27.04 and $36.91.
The fund has a beta of 1.08 and standard deviation of 25.32% for the trailing three-year period. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Mid-Cap Value ETF is an excellent option for investors seeking to outperform the Style Box - Mid 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 $6.77 billion in assets, iShares ESG Aware MSCI USA ETF has $18.97 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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Get it free >>Nuveen ESG Mid-Cap Value ETF (NUMV): ETF Research Reports
ONEOK, Inc. (OKE) : Free Stock Analysis Report
Baker Hughes Company (BKR) : 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
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
