Strength in Nuveen ESG Large-Cap Value ETF's People Pillar is partially offset by an Average Process Pillar rating, leading to a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy gets an Average Process Pillar. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight in liquidity exposure and an 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 management team earns an Above Average People Pillar rating. 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

Coca-Cola

Disney

PepsiCo

Procter & Gamble

Verizon

Eaton

Texas Instruments

Lowe's

Amgen

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. Nuveen ESG Large-Cap Value ETF earns an Average Process Pillar rating. 

The leading factor in 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. The parent firm's risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.1 stars, also supports the rating. Lastly, the process is limited by the fund's mediocre long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

 This strategy tends to pick smaller market-cap companies compared with the average fund in its peer group, the Large Value Morningstar Category.  But in terms of investment style, it is on par with peers. Looking at additional factor exposure, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also favored low-quality stocks. This means the fund avoids holding companies that are consistently profitable, growing, and have solid balance sheets. Such positions do not tend to provide much ballast for a portfolio. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Additionally, the strategy had more exposure to high-momentum stocks compared with Morningstar Category peers in recent months. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks.  More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in technology and consumer defensive relative to the category average by 6.9 and 3.0 percentage points, respectively. The sectors with low exposure compared to category peers are energy and consumer cyclical, underweight the average by 5.7 and 3.6 percentage points of assets, respectively. The strategy owns 97 securities and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 21.0% of the portfolio's assets were concentrated in the top 10 fund holdings, as opposed to the category’s 27.4% average. And in closing, in terms of portfolio turnover, on a year-over-year basis, 61% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Average

Process

Nuveen ESG Large-Cap Value ETF's strong team drives the strategy's Above Average People Pillar rating. There are two managers listed on the fund: Lei Liao, Philip Campagna. The team is well equipped, with an average of 14 years of 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.

Above Average

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.

Parent

NuShares ESG

NULV tracks an index of US large-cap value stocks that score highly on environmental, social, and governance (ESG) criteria. The fund is weighted using a multi-factor optimizer.

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