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ETFs have been growing in popularity as they offer several benefits over other investment vehicles. They provide active or passive professional management with intraday liquidity at a market price. This wrapper allows for greater transparency into underlying assets and lower investment minimums in comparison to other product wrappers.
An exchange traded fund (ETF) is a diversified portfolio of stocks or bonds in a single investment that trades like a stock. They can either track an index — passive — or seek to outperform a benchmark — active. Both management styles provide access to diverse markets, asset classes and types of securities.
ETFs are well-suited for most investors seeking professional portfolio management with accessible entry points through low minimum investments, intraday trading flexibility, lower costs, holdings transparency and enhanced tax efficiency compared to other investment options. This makes ETFs suitable for both retail and institutional investors.
The active ETF structure allows portfolio managers to make daily security selections with the goal of outperforming a benchmark, while passive ETFs provide portfolio managers the opportunity to replicate the market performance of an index. Both active and passive products capture the unique benefits of the ETF vehicle.
Exchange traded funds (ETFs) are investments in a portfolio of individual securities that are traded like stocks on an exchange.
ETF benefits include portfolio diversification, no investment minimum, real-time pricing throughout the trading day, lower costs on average and flexible tradability that allows the investor to buy and sell anytime during market hours. Additionally, an ETF offers the potential for tax efficiency due to the unique in-kind structure that could generate fewer capital gains distributions.
ETFs can be accessed through a financial advisor or asset management institution such as Nuveen. ETFs trade in brokerage accounts and in retirement accounts such as Roth IRAs and Traditional IRAs.
Exchange-traded funds come in various types based on their investment approach and focus.
Nuveen offers both actively managed and index-based ETFs with particular strength in municipal bond strategies for tax-efficient income, fixed-income solutions, sector-focused approaches and responsible investing that leverage our investment expertise.
Selecting the right ETF requires aligning investment objectives — growth, income or tax-advantaged returns — with the appropriate asset class and strategy. Consider risk tolerance and timeline, as longer horizons can accommodate more volatility while shorter periods favor conservative approaches. Evaluate whether passive or active management fits investment goals, and review expense ratios to ensure cost-effectiveness.
Nuveen offers ETFs across equity, fixed income, municipal bonds and responsible investing strategies designed to meet diverse investor needs with institutional investment expertise.
ETFs and mutual funds both provide access to diversified portfolios of securities. However, they differ in several important ways:
While ETFs offer many benefits like diversification and liquidity, understanding their limitations can help determine whether they align with an investment strategy.
At Nuveen, we believe understanding these considerations helps investors make more informed investment decisions.
Important information on risk
Past performance is no guarantee of future results. Exchange-traded fund shares are subject to investment risk, including the possible loss of the entire principal amount that you invest, and there is no assurance that an investment will provide positive performance over any period of time. At any point in time, your investment may be worth less than you paid, even after considering the reinvestment of fund distributions. There is no guarantee that the Fund's investment objectives will be achieved.
Shares of ETFs are bought and sold at market price as opposed to net asset value. As a result, an investor may pay more than net asset value when buying and receive less than net asset value when selling. In addition, brokerage commissions will reduce returns. Fund shares are not individually redeemable directly with the Fund, but blocks of shares may be acquired from the Fund and tendered for redemption to the Fund by certain institutional investors in Creation Units.
Responsible investing incorporates Environmental Social Governance (ESG) factors that may affect exposure to issuers, sectors, industries, limiting the type and number of investment opportunities available, which could result in excluding investments that perform well.
ESG integration incorporates financially relevant ESG factors into investment research in support of portfolio management for actively managed strategies. Financial relevancy of ESG factors varies by asset class and investment strategy. Applicability of ESG factors may differ across investment strategies. ESG factors are among many factors considered in evaluating an investment decision, and unless otherwise stated in the relevant offering memorandum or prospectus, do not alter the investment guidelines, strategy or objectives.
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