Is Nuveen ESG Mid-Cap Growth ETF (NUMG) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Mid Cap Growth category of the market, the Nuveen ESG Mid-Cap Growth ETF (NUMG) is a smart beta exchange traded fund launched on 12/13/2016.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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 $420.20 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Growth. This particular fund seeks to match the performance of the TIAA ESG USA Mid-Cap Growth Index before fees and expenses.
The Nuveen ESG USA Mid-Cap Growth Index 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 this ETF are 0.31%, making it on par with most peer products in the space.
NUMG's 12-month trailing dividend yield is 0.06%.
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.
Representing 27.20% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Healthcare round out the top three.
Taking into account individual holdings, Quanta Services Inc. (PWR) accounts for about 4.51% of the fund's total assets, followed by Axon Enterprise (AXON) and Grainger W.w. Inc. (GWW).