Is Nuveen ESG Small-Cap ETF (NUSC) a Strong ETF Right Now?

The Nuveen ESG Small-Cap ETF (NUSC) made its debut on 12/13/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small 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.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

Because the fund has amassed over $1.15 billion, this makes it one of the average sized ETFs in the Style Box - Small Cap Growth. NUSC is managed by Nuveen. NUSC seeks to match the performance of the TIAA ESG Small-Cap Index before fees and expenses.

The Nuveen ESG USA Small-Cap Index composed of equity securities issued by small-capitalization companies listed on U.S. exchanges.

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Operating expenses on an annual basis are 0.31% for NUSC, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.05%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

NUSC's heaviest allocation is in the Industrials sector, which is about 19.7% of the portfolio. Its Financials and Information Technology round out the top three.

When you look at individual holdings, Moderna Inc (MRNA) accounts for about 1.32% of the fund's total assets, followed by Technipfmc Plc (FTI) and Carpenter Technology Corp (CRS).

The top 10 holdings account for about 10.68% of total assets under management.

Performance and Risk

So far this year, NUSC has added about 0.16%, and was up about 14.43% in the last one year (as of 03/20/2026). During this past 52-week period, the fund has traded between $33.38 and $48.45.

The ETF has a beta of 1.06 and standard deviation of 19.31% for the trailing three-year period. With about 444 holdings, it effectively diversifies company-specific risk .

Alternatives

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

Vanguard ESG U.S. Stock ETF Shares (ESGV) tracks FTSE US ALL CAP CHOICE INDEX and the iShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. Vanguard ESG U.S. Stock ETF Shares has $11.21 billion in assets, iShares ESG Aware MSCI USA ETF has $15.08 billion. ESGV has an expense ratio of 0.09% and ESGU changes 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 Style Box - Small 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.

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Nuveen ESG Small-Cap ETF (NUSC): ETF Research Reports

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

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