Rather than weighting by capitalization, the Enhanced Index assigns component securities into a variety of categories based upon asset class, sector, credit quality, and maturity, and then uses a rules-based methodology to allocate higher weights to categories with the potential for higher yields without significantly increasing risk or decreasing credit quality.
“Find a product that really allocated yield. [Investors] can hopefully hope to ride out some of the worst of the rising rate effect but still pick up the return of their investment needs,” Kremenstein said.
Additionally, Nuveen has launched a line of ETFs that screen companies of various market capitalization and asset categories for environmental, social and governance principles, such as the NuShares ESG Large-Cap Growth ETF (BATS: NULG), which seeks to track the investment results, before fees and expenses, of the TIAA ESG USA Large-Cap Growth Index
“ESG is something that really goes to the heart of our parent company,” Kremenstein said. “We’ve been running ESG annuities, I think, since the 1990s. We have a big ESG research team.”
The ETFs tap into the “credibility and rigor of our ESG research team,” Kremenstein added.