Is Nuveen ESG Large-Cap Growth ETF (NULG) a Strong ETF Right Now?

Making its debut on 12/13/2016, smart beta exchange traded fund Nuveen ESG Large-Cap Growth ETF (NULG) provides investors broad exposure to the Style Box - Large Cap Growth 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.

Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.

On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.

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.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

The fund is sponsored by Nuveen. It has amassed assets over $1.46 billion, making it one of the average sized ETFs in the Style Box - Large Cap Growth. NULG, before fees and expenses, seeks to match the performance of the TIAA ESG USA Large-Cap Growth Index.

The Nuveen ESG USA Large-Cap Growth Index composes of equity securities issued by large capitalization companies listed on U.S. exchanges.

Cost & Other Expenses

Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.

Operating expenses on an annual basis are 0.26% for NULG, making it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 0.16%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

For NULG, it has heaviest allocation in the Information Technology sector --about 46% of the portfolio --while Consumer Discretionary and Telecom round out the top three.

When you look at individual holdings, Nvidia Corp (NVDA) accounts for about 11.96% of the fund's total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc (GOOG).

Its top 10 holdings account for approximately 51.89% of NULG's total assets under management.

Performance and Risk

The ETF has lost about -2.92% so far this year and was up about 10.82% in the last one year (as of 05/12/2025). In the past 52-week period, it has traded between $70.54 and $90.90.

The fund has a beta of 1.19 and standard deviation of 22.09% for the trailing three-year period. With about 74 holdings, it effectively diversifies company-specific risk.

Alternatives

Nuveen ESG Large-Cap Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.

IShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) tracks ----------------------------------------. IShares ESG Aware MSCI USA ETF has $12.75 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $24.68 billion. ESGU has an expense ratio of 0.15% and JEPQ charges 0.35%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Growth.

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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research