Nuveen has expanded upon its NuShares exchange traded fund suite to help investors gain exposure to international companies that exhibit strong environmental, social and governance principles.
On Wednesday, Nuveen launched the NuShares ESG International Developed Markets Equity ETF (BATS: NUDM) and NuShares ESG Emerging Markets Equity ETF (BATS: NUEM). NUDM has a 0.40% expense ratio and NUEM has a 0.45% expense ratio.
“As we designed our latest ETF offering, we wanted to squarely address investors’ desire to diversify their core equity portfolio with investment options that not only provide key benchmark exposure, but also align their international equity investments with their values,” Martin Kremenstein, Senior Managing Director and Head of Exchange-Traded Funds at Nuveen, said in a note. “To date, there have been limited ETF solutions for investors who value ESG principles, yet want to assemble a full equity asset allocation framework. When taken as a whole, our growing suite of ESG ETFs addresses this need.”
NUDM tries to reflect the performance of the TIAA ESG International Developed Markets Equity Index, which is comprised of developed market companies outside North America taken from the MSCI EAFE Index that meet certain ESG criteria based on ESG performance data collected by MSCI ESG Research.
NUEM tries to reflect the performance of the TIAA ESG Emerging Markets Equity Index, which is comprised of emerging market companies taken from the MSCI Emerging Markets Index that meet certain ESG criteria based on data collected by MSCI ESG Research.
The environmental assessment category can include a company’s impact on climate change, natural resource use, and waste management and emission management, according to the prospectus sheet. Social evaluation categories include a company’s relations with employees and suppliers, product safety and sourcing practices. Governance assessment categories can include a company’s corporate governance practices and business ethics.
Furthermore, the ESG criteria also considers how well a company adheres to national and international laws and regulations, along with commonly accepted global norms related to ESG matters. The underlying indices generally exclude companies with significant activities in certain controversial businesses, including those involving alcohol, tobacco, military weapons, firearms, nuclear power and gambling, among others.
“We’ve certainly seen that investor motivations for adopting responsible investment approaches to managing their money are on the rise,” Amy O’Brien, managing director and head of Responsible Investment at TIAA Investments, said in a note. “Investors large and small are beginning to understand that the integration of environmental, social and governance factors within their investment portfolios actually has the potential to reduce risk and enhance long-term investment performance.”
For more information on new fund products, visit our new ETFs category.