The Nuveen ESG Large-Cap Value ETF (NULV) was launched on 12/13/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value 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.
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.
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
The fund is sponsored by Nuveen. It has amassed assets over $1.75 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. NULV 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.26% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.20%.
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.
For NULV, it has heaviest allocation in the Financials sector --about 20.70% of the portfolio --while Information Technology and Healthcare round out the top three.
When you look at individual holdings, Coca Cola Co. (KO) accounts for about 2.52% of the fund's total assets, followed by Oracle Corp. (ORCL) and Pepsico Inc. (PEP).
Its top 10 holdings account for approximately 20.59% of NULV's total assets under management.
Performance and Risk
So far this year, NULV has added about 16.18%, and is up roughly 26.93% in the last one year (as of 10/01/2024). During this past 52-week period, the fund has traded between $32.04 and $41.72.
The fund has a beta of 0.92 and standard deviation of 14.82% for the trailing three-year period. With about 107 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 $13.31 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $16.66 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.
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Get it free >>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
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