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Is Nuveen ESG Mid-Cap Growth ETF (NUMG) a Strong ETF Right Now?
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The Nuveen ESG Mid-Cap Growth ETF (NUMG - Free Report) made its debut on 12/13/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Growth 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
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
The fund is managed by Nuveen, and has been able to amass over $344.47 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, NUMG seeks to match the performance of the TIAA ESG USA Mid-Cap Growth Index.
The TIAA ESG USA Mid-Cap Growth Index comprises of equity securities issued by mid- capitalization companies listed on US exchanges. It uses a rules-based methodology that provides investment exposure that generally replicates that of mid-cap growth 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.
NUMG's 12-month trailing dividend yield is 0.17%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 32.80% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Industrials round out the top three.
Taking into account individual holdings, Mettler-Toledo International (MTD - Free Report) accounts for about 3.08% of the fund's total assets, followed by Keysight Technologies In (KEYS - Free Report) and Alnylam Pharmaceuticals Inc (ALNY - Free Report) .
The top 10 holdings account for about 26.06% of total assets under management.
Performance and Risk
The ETF has added roughly 5.80% so far this year and is down about -17.88% in the last one year (as of 03/30/2023). In the past 52-week period, it has traded between $32.21 and $44.35.
NUMG has a beta of 1.11 and standard deviation of 26.15% for the trailing three-year period. With about 61 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Mid-Cap Growth ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
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 $7.09 billion in assets, iShares ESG Aware MSCI USA ETF has $14.10 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 Growth.
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 Mid-Cap Growth ETF (NUMG) a Strong ETF Right Now?
The Nuveen ESG Mid-Cap Growth ETF (NUMG - Free Report) made its debut on 12/13/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Growth 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
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
The fund is managed by Nuveen, and has been able to amass over $344.47 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Growth. Before fees and expenses, NUMG seeks to match the performance of the TIAA ESG USA Mid-Cap Growth Index.
The TIAA ESG USA Mid-Cap Growth Index comprises of equity securities issued by mid- capitalization companies listed on US exchanges. It uses a rules-based methodology that provides investment exposure that generally replicates that of mid-cap growth 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.
NUMG's 12-month trailing dividend yield is 0.17%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 32.80% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Industrials round out the top three.
Taking into account individual holdings, Mettler-Toledo International (MTD - Free Report) accounts for about 3.08% of the fund's total assets, followed by Keysight Technologies In (KEYS - Free Report) and Alnylam Pharmaceuticals Inc (ALNY - Free Report) .
The top 10 holdings account for about 26.06% of total assets under management.
Performance and Risk
The ETF has added roughly 5.80% so far this year and is down about -17.88% in the last one year (as of 03/30/2023). In the past 52-week period, it has traded between $32.21 and $44.35.
NUMG has a beta of 1.11 and standard deviation of 26.15% for the trailing three-year period. With about 61 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Mid-Cap Growth ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
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 $7.09 billion in assets, iShares ESG Aware MSCI USA ETF has $14.10 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 Growth.
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.