Is Nuveen ESG MidCap Value ETF (NUMV) a Strong ETF Right Now?

Designed to provide broad exposure to the Style Box - Mid Cap Value category of the market, the Nuveen ESG MidCap Value ETF (NUMV) is a smart beta exchange traded fund launched on 12/13/2016.

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.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

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.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

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

Managed by Nuveen, NUMV has amassed assets over $330.50 million, making 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.

Annual operating expenses for this ETF are 0.30%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.47%.

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 NUMV, it has heaviest allocation in the Financials sector --about 21.20% of the portfolio --while Industrials and Real Estate round out the top three.

When you look at individual holdings, Arthur J Gallagher & Co (AJG) accounts for about 2.42% of the fund's total assets, followed by Carrier Global Corp (CARR) and Oneok Inc (OKE).

Its top 10 holdings account for approximately 20.44% of NUMV's total assets under management.

Performance and Risk

So far this year, NUMV has lost about -10.68%, and is down about -4.28% in the last one year (as of 09/12/2022). During this past 52-week period, the fund has traded between $29.70 and $39.58.

The ETF has a beta of 1.06 and standard deviation of 27.43% for the trailing three-year period. With about 81 holdings, it effectively diversifies company-specific risk.

Alternatives

Nuveen ESG MidCap 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 $6.45 billion in assets, iShares ESG Aware MSCI USA ETF has $22.86 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.