Is Nuveen ESG International Developed Markets Equity ETF (NUDM) a Strong ETF Right Now?
The Nuveen ESG International Developed Markets Equity ETF (NUDM) was launched on 06/07/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
Because the fund has amassed over $388.34 million, this makes it one of the average sized ETFs in the Broad Developed World ETFs. NUDM is managed by Nuveen. Before fees and expenses, this particular fund seeks to match the performance of the TIAA ESG International Developed Markets Equity Index.
The TIAA ESG International Developed Markets Equity Index uses a rules-based methodology to arrive at a diversified portfolio of equity securities issued by companies located in countries with developed markets, excluding the U.S. and Canada, that adhere to predetermined ESG, controversial business involvement and low-carbon criteria.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for NUDM are 0.31%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 3.14%.
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.
Taking into account individual holdings, Nestle Sa-Reg /chf/ accounts for about 3.37% of the fund's total assets, followed by Asml Holding Nv /eur/ and Novo Nordisk A/s-B /dkk/.
NUDM's top 10 holdings account for about 19.86% of its total assets under management.
Performance and Risk
So far this year, NUDM has gained about 17.61%, and it's up approximately 16.35% in the last one year (as of 01/01/2024). During this past 52-week period, the fund has traded between $25.80 and $29.66.
The ETF has a beta of 0.88 and standard deviation of 16.86% for the trailing three-year period. With about 161 holdings, it effectively diversifies company-specific risk.
Alternatives
Nuveen ESG International Developed Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) tracks ---------------------------------------- and the iShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. JPMorgan Nasdaq Equity Premium Income ETF has $8.38 billion in assets, iShares ESG Aware MSCI USA ETF has $13.36 billion. JEPQ has an expense ratio of 0.35% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World 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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Nuveen ESG International Developed Markets Equity ETF (NUDM): ETF Research Reports
iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
JPMorgan Nasdaq Equity Premium Income ETF (JEPQ): ETF Research Reports
