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

Designed to provide broad exposure to the Style Box – Small Cap Growth category of the market, the Nuveen ESG Small-Cap ETF (NUSC – Free Report) is a smart beta exchange traded fund launched on 12/13/2016.

What are smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns

If you’re the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.

Fund sponsor and index

The fund is sponsored by Nuveen. It has amassed assets over $1.24 billion, making it one of the average sized ETFs in the Style Box – Small Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the TIAA ESG Small-Cap Index.

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

Cost and 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.

The fund has a 12-month trailing dividend yield of 1.08%.

Sector exposure and top holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Representing 19.9% of the portfolio, the fund has heaviest allocation to the Industrials sector; Financials and Information Technology round out the top three.

Taking into account individual holdings, Comfort Systems Usa Inc (FIX) accounts for about 1.34% of the fund’s total assets, followed by Kratos Defense & Security (KTOS) and Technipfmc Plc (FTI).

Its top 10 holdings account for approximately 9.99% of NUSC’s total assets under management.

Performance and risk

The ETF has gained about 5.86% and is down about -0.83% so far this year and in the past one year (as of 11/11/2025), respectively. NUSC has traded between $33.38 and $46.20 during this last 52-week period.

The ETF has a beta of 1.11 and standard deviation of 19.77% for the trailing three-year period. With about 445 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 (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 has $11.79 billion in assets, iShares ESG Aware MSCI USA ETF has $15.33 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.