Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the Nuveen ESG Large-Cap Value ETF (NULV) is a smart beta exchange traded fund launched on 12/13/2016.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
NULV is managed by Nuveen, and this fund has amassed over $1.66 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the TIAA ESG USA Large-Cap Value Index before fees and expenses.
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
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 NULV are 0.26%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.30%.
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.
NULV's heaviest allocation is in the Financials sector, which is about 21.40% of the portfolio. Its Healthcare and Information Technology round out the top three.
When you look at individual holdings, Oracle Corp. (ORCL) accounts for about 2.41% of the fund's total assets, followed by Coca Cola Co. (KO) and Pepsico Inc. (PEP).
Its top 10 holdings account for approximately 20.95% of NULV's total assets under management.
Performance and Risk
Year-to-date, the Nuveen ESG Large-Cap Value ETF has gained about 11.08% so far, and was up about 13.73% over the last 12 months (as of 08/01/2024). NULV has traded between $32.04 and $39.89 in this past 52-week period.
The fund has a beta of 0.92 and standard deviation of 14.72% for the trailing three-year period. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Large-Cap Value ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) tracks ----------------------------------------. IShares ESG Aware MSCI USA ETF has $12.59 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $14.81 billion. ESGU has an expense ratio of 0.15% and JEPQ charges 0.35%.
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.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>Nuveen ESG Large-Cap Value ETF (NULV): ETF Research Reports
CocaCola Company (The) (KO) : Free Stock Analysis Report
PepsiCo, Inc. (PEP) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
