The Nuveen ESG Mid-Cap Value ETF (NUMV) was launched on 12/13/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box – Mid Cap Value 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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
Managed by Nuveen, NUMV has amassed assets over $442.53 million, making it one of the average sized ETFs in the Style Box – Mid Cap Value. NUMV, before fees and expenses, seeks to match the performance of the TIAA ESG USA Mid-Cap Value Index.
The Nuveen ESG USA Mid-Cap Value Index primarily composes of equity securities issued by mid-capitalization companies listed on U.S. exchanges.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for NUMV are 0.31%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.00%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 19.6% of the portfolio, the fund has heaviest allocation to the Financials sector; Industrials and Information Technology round out the top three.
Looking at individual holdings, Cardinal Health Inc. (CAH) accounts for about 2.34% of total assets, followed by State Street Corp. (STT) and United Rentals Inc. (URI).
