What You Need to Know
- The three active equity ETFs are semi-transparent funds that reveal their holdings monthly, rather than daily.
- The three ETFs are essentially clones of mutual funds with fees lower than those funds' institutional shares.
- Nuveen's entry into the active ETF market follows similar moves by DFA, T. Rowe Price, Putnam Investments and others.
Nuveen, the asset management unit of TIAA, has launched its first active ETFs, joining a growing number of asset managers that also recently took the plunge, including Dimensional Fund Advisors, T. Rowe Price and Putnam Investments.
The Nuveen suite of active ETFs consists of three semi-transparent funds that are ETF versions of the firm’s actively managed mutual funds. They are the Nuveen Small-Cap Select ETF (NSCS), the Nuveen Dividend Growth ETF (NDVG) and the Nuveen Winslow Large-Cap Growth ESG ETF (NWLG).
All three ETFs trade on the NYSE and disclose only proxy portfolio holdings, rather than actual holdings, on a daily basis, unlike traditional ETFs. They do so to maintain the secrecy of their trading strategy and avoid any potential front-running by other market participants.
The ETFs use the NYSE’s licensed proxy portfolio structure for this and will disclose their holdings on a monthly basis following the same disclosure schedule as the mutual funds they resemble.
Jordan Farris, head of ETF product at Nuveen, said in a statement that the ETFs represent “an intuitive evolution” of Nuveen’s “proud tradition of active management.” The strategies incorporate the firm’s “unique combination of expertise in stock selection, analytics and portfolio modeling with product structuring capabilities” used across its $1.2 trillion platform.