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Is Nuveen ESG International Developed Markets Equity ETF (NUDM) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Nuveen ESG International Developed Markets Equity ETF (NUDM - Free Report) debuted on 06/07/2017, and offers broad exposure to the Broad Developed World ETFs 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Nuveen, and has been able to amass over $245.37 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the TIAA ESG International Developed Markets Equity Index before fees and expenses.
The TIAA ESG International Developed Markets Equity Index uses a rules-based methodology to arrive at a diversified portfolio of equity securities issued by companies located in countries with developed markets, excluding the U.S. and Canada, that adhere to predetermined ESG, controversial business involvement and low-carbon 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's 12-month trailing dividend yield comes in at 4.84%.
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.
When you look at individual holdings, Nestle Sa-Reg /chf/ accounts for about 3.73% of the fund's total assets, followed by Sony Group Corp /jpy/ and Glaxosmithkline Plc /gbp/ (GSK - Free Report) .
Its top 10 holdings account for approximately 18.93% of NUDM's total assets under management.
Performance and Risk
The ETF has lost about -11.63% so far this year and is down about -10.07% in the last one year (as of 05/31/2022). In the past 52-week period, it has traded between $25.70 and $33.19.
NUDM has a beta of 0.84 and standard deviation of 21.51% for the trailing three-year period. With about 174 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG International Developed Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $7.18 billion in assets, iShares ESG Aware MSCI USA ETF has $23.11 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 Broad Developed World ETFs.
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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Is Nuveen ESG International Developed Markets Equity ETF (NUDM) a Strong ETF Right Now?
A smart beta exchange traded fund, the Nuveen ESG International Developed Markets Equity ETF (NUDM - Free Report) debuted on 06/07/2017, and offers broad exposure to the Broad Developed World ETFs 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Nuveen, and has been able to amass over $245.37 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the TIAA ESG International Developed Markets Equity Index before fees and expenses.
The TIAA ESG International Developed Markets Equity Index uses a rules-based methodology to arrive at a diversified portfolio of equity securities issued by companies located in countries with developed markets, excluding the U.S. and Canada, that adhere to predetermined ESG, controversial business involvement and low-carbon 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's 12-month trailing dividend yield comes in at 4.84%.
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.
When you look at individual holdings, Nestle Sa-Reg /chf/ accounts for about 3.73% of the fund's total assets, followed by Sony Group Corp /jpy/ and Glaxosmithkline Plc /gbp/ (GSK - Free Report) .
Its top 10 holdings account for approximately 18.93% of NUDM's total assets under management.
Performance and Risk
The ETF has lost about -11.63% so far this year and is down about -10.07% in the last one year (as of 05/31/2022). In the past 52-week period, it has traded between $25.70 and $33.19.
NUDM has a beta of 0.84 and standard deviation of 21.51% for the trailing three-year period. With about 174 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG International Developed Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI EAFE ETF (ESGD - Free Report) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $7.18 billion in assets, iShares ESG Aware MSCI USA ETF has $23.11 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 Broad Developed World ETFs.
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.