Yahoo Finance Is Nuveen ESG Small-Cap ETF (NUSC) a Strong ETF Right Now?
A smart beta exchange traded fund, the Nuveen ESG Small-Cap ETF (NUSC) debuted on 12/13/2016, and offers broad exposure to the Style Box - Small 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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Nuveen, NUSC has amassed assets over $1.11 billion, making it one of the larger ETFs in the Style Box - Small Cap Growth. Before fees and expenses, this particular fund seeks to match the performance of the TIAA ESG Small-Cap Index.
The TIAA ESG USA Small-Cap Index comprises of equity securities issued by small-capitalization companies listed on US exchanges.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.31% for NUSC, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.11%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For NUSC, it has heaviest allocation in the Industrials sector --about 18.70% of the portfolio --while Consumer Discretionary and Financials round out the top three.
When you look at individual holdings, Service Corp International (SCI) accounts for about 1.02% of the fund's total assets, followed by Murphy Usa Inc (MUSA) and Emcor Group Inc (EME).
NUSC's top 10 holdings account for about 8.59% of its total assets under management.
Performance and Risk
Year-to-date, the Nuveen ESG Small-Cap ETF has lost about -0.28% so far, and is up about 10.28% over the last 12 months (as of 06/27/2024). NUSC has traded between $31.77 and $41.59 in this past 52-week period.
The ETF has a beta of 1.14 and standard deviation of 21.45% for the trailing three-year period. With about 515 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG Small-Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Growth 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 $12.92 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $14.82 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 - Small 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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Nuveen ESG Small-Cap ETF (NUSC): ETF Research Reports
EMCOR Group, Inc. (EME) : Free Stock Analysis Report
Murphy USA Inc. (MUSA) : Free Stock Analysis Report
Service Corporation International (SCI) : Free Stock Analysis Report
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ): ETF Research Reports
