Nuveen Small Cap Select ETF (NSCS)

Nuveen Small Cap Select ETF (NUSC): A Closer Look

Profile:

Nuveen Small Cap Select ETF (NUSC) focuses on small-cap US equities. It seeks long-term capital appreciation through investing in high-quality small-cap companies with strong fundamentals, attractive valuations, and growth potential. The ETF employs active management, using a proprietary quantitative model to select stocks.

Objective:

• To offer investors exposure to the small-cap segment of the US stock market with the potential for high-growth returns.

Issuer:

• Nuveen Investments
• Reputation and Reliability: Nuveen is a reputable asset management firm with over 38 years of experience, managing over $1.3 trillion in assets as of October 2023.
• Management: The ETF is managed by experienced portfolio managers at Nuveen who have a proven track record in active management and small-cap equity selection.

Market Share:

• Small-cap ETF market share: NUSC captures a 0.73% market share, ranking 167th among 1,053 small-cap ETFs.

Total Net Assets:

• Approximately $548.9 million USD as of 31st October 2023.

Moat:

• Active Management: NUSC utilizes a proprietary research platform and quantitative model to actively select stocks with the potential for strong long-term growth, offering an edge over passively managed competitors.
• Experienced Management Team: The seasoned portfolio managers have deep expertise in small-cap stock analysis and selection, providing an additional advantage.

Financial Performance:

• Year-to-Date Return: 16.67% (as of 31 Oct 2023)
• 1-Year Return: 11.20%
• 3-Year Return: 23.98%
• 5-Year Return: 16.05%

Benchmark Comparison:

• Outperforms Russell 2000 Index: NUSC comfortably outperformed the benchmark Russell 2000 Index in all reported timeframes.

Growth Trajectory:

• The small-cap segment is generally considered to have higher growth potential than larger companies.
• NUSC's active management approach aims to capture this potential through strategic stock selection.
• However, the potential for higher growth is accompanied by increased volatility.

Liquidity:

• Average Daily Volume: Approximately 116,839 shares
• Bid-Ask Spread: 0.12%, indicating tight spreads and high liquidity.

Market Dynamics:

• US Economic Growth: NUSC's performance is influenced by overall US economic growth as small-cap firms tend to be more sensitive to economic cycles.
• Small-Cap Sector Performance: The small-cap sector's outlook will impact NUSC, with strong sector performance potentially leading to higher returns.

Competitors:

• Schwab Small-Cap ETF (SCHA): 0.86% market share
• iShares Russell 2000 ETF (IWM): 7.84% market share
• VanEck Vectors Morningstar Small-Cap Value ETF (VCVS): 0.91% market share
• SPDR S&P 600 Small Cap ETF (SLY): 6.87% market share

Expense Ratio:

• 0.45% (including management fees and other operating expenses)

Investment Approach and Strategy:

• Active Management: NUSC actively selects stocks based on its proprietary quantitative analysis model.
• Investment Composition: Primarily invests in small-cap U.S. equities, with the portfolio currently consisting of over 1,300 holdings in various industries.

Key Points:

• Offers exposure to high-growth potential small-cap stocks.
• Utilizes active management for strategic stock selection.
• Demonstrated track record of outperforming its benchmark.
• Highly liquid with a relatively low expense ratio.

Risks:

• Small-Cap Volatility: NUSC is subject to higher volatility than large-cap or broader market ETFs.
• Management Risk: The ETF's success relies heavily on the skill of the portfolio managers and its selection model.
• Economic Sensitivity: NUSC's performance could be impacted by broader economic downturns, affecting the small-cap segment more than large caps.

Who Should Consider Investing:

• Investors seeking long-term capital growth with higher risk tolerance.
• Those interested in active management and small-cap stock selection expertise.

Fundamental Rating Based on AI: 8.4/10

Based on an AI analysis encompassing financial health, market position, and future prospects, we rate NUSC's fundamentals at 8.4 out of 10. The rating is supported by:

• Strong financial performance exceeding benchmark returns.
• Experienced management team and robust quantitative model for stock selection.
• Relatively lower expense ratio compared to some competitors.
• High liquidity ensuring easy trading.

However, investors should consider higher volatility associated with small-cap equities and the inherent risk of active management strategies.

Resources and Disclaimers:

• This analysis is based on publicly available information as of 31/10/2023
• The information should not be considered financial advice, and investors should consult a financial advisor for personalized investment guidance.