A strong management team and sound investment process underpin Nuveen ESG Intl Dev Mkts Eq ETF's Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy's effective investment approach earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight liquidity exposure and has a significant underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy's parent organization earns the firm an Average Parent Pillar rating, and this rating is inherited from vehicles belonging to the same branding entity and is indirectly assigned by an analyst.

Analyst Rating

ASML Hld

ING Group 6.2 % Perpetual Debt Secs 2003-Without Fixed Called for red.on 16.10.17 at USD 25

Credit Suisse

Autoliv

Suncor Energy

Brookfield Corp

NatWest Group plc 

Tractor Supply

American Shared Hospital Services

Genpact

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Nuveen ESG Intl Dev Mkts Eq ETF earns an Above Average Process Pillar rating. The most substantial contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Strong risk-adjusted performance also strengthens the process. This can be seen in the fund's five-year alpha calculated relative to the category average, which suggests that the process was successful over that period. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 50%. The measure indicates the percentage of a firm's funds that survived and beat their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's modest success ratio suggests that the firm could do better across its fund lineup.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to track the investment results, before fees and expenses, of the TIAA ESG International Developed Markets Equity Index (the "index").  In seeking to track the investment results of the index, the advisor attempts to replicate the index by investing all, or substantially all, of its assets in the securities represented in the index in approximately the same proportions as the index. The index identifies equity securities from the base index that satisfy certain ESG criteria, based on ESG performance data collected by MSCI ESG Research, and Inc. 

 The portfolio has allocations in its top two sectors, financial services and healthcare, that are similar to the category. The sectors with low exposure compared to category peers are energy and technology, with energy underweighting the average portfolio by 3.4 percentage points of assets and technology similar to the average. The portfolio is positioned across 157 holdings and is quite concentrated. Specifically, 22.0% of the fund’s assets are housed within the top 10 holdings, compared to the typical peer's 15.4%. And finally, in terms of portfolio turnover, on a year-over-year basis, 66% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

Nuveen’s team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are two managers listed on the fund: Lei Liao, Philip Campagna. Experience on the team is abundant, with 14 years of average portfolio management experience. Together, they manage a total of 10 strategies, with a Bronze asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate.  

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

People

Nuveen has accomplished years of refinement, but a handful of areas keep it from landing among the industry’s best. It retains an Average Parent rating.
Nuveen is the asset-management arm of TIAA. TIAA purchased Nuveen in October 2014 and in January 2017 announced that Nuveen would become the umbrella brand for all its asset-management capabilities, including the legacy Nuveen and TIAA investment teams and their affiliates. 
Since then, a dramatic transformation has taken place. This includes merging all but one affiliated investment team into centralized equity and fixed-income groups, which are now among the industry’s largest. All operations, technology, and sales functions were centralized and modernized; in 2019, the firm rolled out a comprehensive long-term incentive plan that has helped attract and retain talent, and the previously expansive investment lineup has been mostly cleaned up.
Nuveen’s investment strengths are predominantly in fixed income and real assets. While its municipal team is among the industry’s more ubiquitous, its aggressive approach has been a sticking point for several years. Its experienced equity team hasn’t distinguished its performance from peers’. Finally, CEO Jose Minaya has built a robust management team, but several of them are recent outside hires and so it will take time to see how they integrate with Minaya’s modernized vision for the firm.

Average

Parent

NuShares ESG International Developed Markets Equity ETF

NUDM tracks an index of companies from developed countries, excluding the US and Canada, that align with various environmental, social, and governance principles.

A smart beta exchange traded fund, the Nuveen ESG International Developed Markets Equity ETF (NUDM) debuted on 06/07/2017, and offers broad exposure to the Broad Developed World ETFs category of the market.

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