Nuveen Cuts Fees on $4.3 Billion of ETFs, Launches Two New Funds
(Bloomberg) -- Nuveen is launching two exchange-traded funds and reducing fees on nine ETFs as the race to grab share in the $6.8 trillion U.S. industry accelerates.
The investment manager opened the Growth Opportunities ETF (ticker NUGO) and the ESG Dividend ETF (ticker NUDV) Tuesday. The firm also is cutting expense ratios by 10 basis points for seven equity ETFs and five basis points for two fixed-income funds. The nine funds meet environmental, social and governance standards and have a total of $4.3 billion under management.
Nuveen’s fee reductions are “really the result of us having achieved a certain level of scale in the product suite and really desiring to make these even more cost effective for our existing clients and then more attractive for our future clients,” Jordan Farris, head of ETF product, said in an interview.
Fund managers have been in a price competition for years as investors seek to lower costs. In March, BlackRock Inc. and State Street Corp. -- two of the largest ETF issuers -- cut fees on some funds in rapid succession.
Nuveen’s Growth Opportunities ETF, with a 0.55% expense ratio, is an active-semi transparent fund that will report holdings monthly. Unlike three ETFs that launched in August, NUGO is not based on an existing mutual fund. It will invest in 45 to 60 stocks in the Russell 1000 Growth index analyzed on growth, quality and valuation characteristics, Karen Hiatt, portfolio manager of the fund, said in an interview.
The ESG Dividend ETF, with an expense ratio of 0.25%, will track an index of high dividend paying stocks that are assessed on ESG and low carbon criteria that Nuveen applies to its existing funds, Farris said. “The consistent theme that we heard from our engagements with advisers, with investors was there still is this major search for yield as we continue to be in a very low interest rate environment,” he said.
Nuveen, owned by TIAA, manages a total of $1.2 trillion in assets as of the end of June.
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