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Is Nuveen ESG International Developed Markets Equity ETF (NUDM) a Strong ETF Right Now?
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Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the Nuveen ESG International Developed Markets Equity ETF (NUDM - Free Report) is a smart beta exchange traded fund launched on 06/07/2017.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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 managed by Nuveen, and has been able to amass over $347.58 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. NUDM 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.30%.
It has a 12-month trailing dividend yield of 1.79%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Nestle Sa-Reg /chf/ accounts for about 3.40% of total assets, followed by Asml Holding Nv /eur/ and Sony Group Corp /jpy/.
Its top 10 holdings account for approximately 14.45% of NUDM's total assets under management.
Performance and Risk
Year-to-date, the Nuveen ESG International Developed Markets Equity ETF return is roughly 10.43% so far, and was up about 3.61% over the last 12 months (as of 04/13/2023). NUDM has traded between $22.23 and $28.65 in this past 52-week period.
The fund has a beta of 0.87 and standard deviation of 18.61% for the trailing three-year period. With about 139 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 $7.31 billion in assets, iShares ESG Aware MSCI USA ETF has $14.03 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?
Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the Nuveen ESG International Developed Markets Equity ETF (NUDM - Free Report) is a smart beta exchange traded fund launched on 06/07/2017.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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 managed by Nuveen, and has been able to amass over $347.58 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. NUDM 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.30%.
It has a 12-month trailing dividend yield of 1.79%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Nestle Sa-Reg /chf/ accounts for about 3.40% of total assets, followed by Asml Holding Nv /eur/ and Sony Group Corp /jpy/.
Its top 10 holdings account for approximately 14.45% of NUDM's total assets under management.
Performance and Risk
Year-to-date, the Nuveen ESG International Developed Markets Equity ETF return is roughly 10.43% so far, and was up about 3.61% over the last 12 months (as of 04/13/2023). NUDM has traded between $22.23 and $28.65 in this past 52-week period.
The fund has a beta of 0.87 and standard deviation of 18.61% for the trailing three-year period. With about 139 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 $7.31 billion in assets, iShares ESG Aware MSCI USA ETF has $14.03 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.