The Nuveen ESG Large-Cap Value ETF (NULV) was launched on 12/13/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box – Large Cap Value category of the market.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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.
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
NULV is managed by Nuveen, and this fund has amassed over $2.6 billion, which makes it one of the average sized ETFs in the Style Box – Large Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the TIAA ESG USA Large-Cap Value Index.
The Nuveen ESG USA Large-Cap Value Index composes of equity securities issued by large capitalization companies listed on U.S. 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.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.26%.
NULV’s 12-month trailing dividend yield is 1.35%.
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.
For NULV, it has heaviest allocation in the Information Technology sector –about 25.4% of the portfolio –while Financials and Healthcare round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT) accounts for about 11.18% of the fund’s total assets, followed by Meta Platforms Inc (META) and Cisco Systems Inc. (CSCO).
