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Is Nuveen ESG Emerging Markets Equity ETF (NUEM) a Strong ETF Right Now?
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Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the Nuveen ESG Emerging Markets Equity ETF (NUEM - Free Report) is a smart beta exchange traded fund launched on 06/07/2017.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
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 $266.95 million, which makes it one of the average sized ETFs in the Broad Emerging Market ETFs. NUEM, before fees and expenses, seeks to match the performance of the TIAA ESG Emerging Markets Equity Index.
The TIAA ESG Emerging Markets Equity Index uses a rules-based methodology to arrive at a diversified portfolio of equity securities issued by companies located in countries with emerging markets that adhere to predetermined ESG, controversial business involvement and low-carbon criteria.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.36%.
NUEM's 12-month trailing dividend yield is 2.28%.
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.
Taking into account individual holdings, Taiwan Semiconductor Man /twd/ accounts for about 9.96% of the fund's total assets, followed by Alibaba Group Holding Lt /hkd/ and Sk Hynix Inc /krw/.
The top 10 holdings account for about 26.37% of total assets under management.
Performance and Risk
The ETF has added about 4.27% so far this year and is up about 5.85% in the last one year (as of 06/04/2024). In the past 52-week period, it has traded between $24.95 and $29.09.
NUEM has a beta of 0.72 and standard deviation of 18.79% for the trailing three-year period. With about 257 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Emerging Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ - Free Report) tracks ----------------------------------------. IShares ESG Aware MSCI USA ETF has $12.80 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $13.73 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 Broad Emerging Market 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 Emerging Markets Equity ETF (NUEM) a Strong ETF Right Now?
Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the Nuveen ESG Emerging Markets Equity ETF (NUEM - Free Report) is a smart beta exchange traded fund launched on 06/07/2017.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
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 $266.95 million, which makes it one of the average sized ETFs in the Broad Emerging Market ETFs. NUEM, before fees and expenses, seeks to match the performance of the TIAA ESG Emerging Markets Equity Index.
The TIAA ESG Emerging Markets Equity Index uses a rules-based methodology to arrive at a diversified portfolio of equity securities issued by companies located in countries with emerging markets that adhere to predetermined ESG, controversial business involvement and low-carbon criteria.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.36%.
NUEM's 12-month trailing dividend yield is 2.28%.
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.
Taking into account individual holdings, Taiwan Semiconductor Man /twd/ accounts for about 9.96% of the fund's total assets, followed by Alibaba Group Holding Lt /hkd/ and Sk Hynix Inc /krw/.
The top 10 holdings account for about 26.37% of total assets under management.
Performance and Risk
The ETF has added about 4.27% so far this year and is up about 5.85% in the last one year (as of 06/04/2024). In the past 52-week period, it has traded between $24.95 and $29.09.
NUEM has a beta of 0.72 and standard deviation of 18.79% for the trailing three-year period. With about 257 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Emerging Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI USA ETF (ESGU - Free Report) tracks MSCI USA ESG Focus Index and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ - Free Report) tracks ----------------------------------------. IShares ESG Aware MSCI USA ETF has $12.80 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $13.73 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 Broad Emerging Market 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.