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Nuveen Adds To ESG Roster With New Large-Cap ETF

June 5, 2019 12:45 pm
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Nuveen Adds To ESG Roster With New Large-Cap ETF

Nuveen, already home to one of the largest lineups of environmental, social and governance (ESG) exchange traded funds, added to that suite Tuesday with the launch of the Nuveen ESG Large-Cap ETF (CBOE: NULC).

What Happened

NULC comes to market at a time of rapid growth for some new, domestic ESG ETFs. A pair of funds in that group that debuted earlier this year, recently hit $1 billion in assets under management, bringing the number of U.S.-listed ETFs at that milestone to five. The new NULC tracks the TIAA ESG USA Large-Cap Index.

“The Index uses a rules-based methodology that seeks to provide investment exposure that generally replicates that of large-cap benchmarks through a portfolio of securities that adhere to predetermined ESG, controversial business involvement and low-carbon screening criteria,” according to Nuveen.

NULC's underlying index is home to nearly 300 stocks and its base selection universe is the MSCI USA Index.

Why It's Important

Nuveen launched its newest ESG ETF just as data from the firm's recent survey indicates investors of various demographics are expressing increased interest in ESG funds.

“Findings from its latest annual survey revealed a fourth consecutive year of strengthening interest in responsible investing among investors, with 93% of millennials and 78% of non-millennials expressing interest in this approach,” according to the issuer.

There are more than 80 ESG ETFs trading in the U.S., but just 11 have more than $300 million in assets under management, a tally expected to grow as more young investors embrace and more studies confirm that virtuous investing does not mean sacrificing returns.

“Findings from the survey also indicated that investment performance and risk management were the driving factors among high net worth investors choosing responsible investing as an approach,” said Nuveen. “Additionally, results indicated a nearly 200% increase in the number of RI conversations taking place between advisors and their clients over the past year.”

What's Next

NULC allocates over 22 percent of its weight to technology stocks while the financial services and health care sectors combine for 26.56 percent of the new ETF's weight. Communication services and consumer discretionary names combine for almost 20 percent.

NULC charges 0.20 percent per year, or $20 on a $10,000 investment. With addition of NULC, Nuveen offers nine ESG ETFs.

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