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ETFs have been growing in popularity because they offer several benefits over other investment vehicles. They provide active or passive professional management with intraday liquidity at a market price. This vehicle allows for greater transparency into underlying assets and lower investment minimums in comparison to other product styles.
An ETF is a portfolio typically of stocks and/or bonds in a single investment that trades like a stock. Active funds seek to outperform a benchmark, while passive funds track an index, both management styles provide access to diverse markets, asset classes and types of securities.
ETFs may be well-suited for investors seeking professional portfolio management with accessible entry points through low minimum investments, intraday trading flexibility, competitive cost structure, holdings transparency and enhanced tax efficiency potential, as compared to other investment options. This can make ETFs suitable for both individual 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 may 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 professional or registered investment adviser firm, and Nuveen manages the underlying investments within the ETF. 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 actively managed and index-based ETFs that draw upon our deep investment experience, in particular, in municipal bond strategies seeking tax-efficient income, other fixed income solutions, sector-focused approaches, and responsible investing.
Selecting the right ETF requires aligning investment objectives — for example: 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.
Backed by institutional investment expertise, Nuveen offers ETFs across equity, fixed income, municipal bonds, and responsible investing aiming to meet diverse investor needs.
ETFs and mutual funds both provide access to portfolios of securities. However, they differ in several important ways:
While ETF's can 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.
The Morningstar fund compare tool quickly evaluates different funds against one another.
The Morningstar portfolio review tool compares and analyzes your portfolio holdings.
Important information on risk
Past performance is no guarantee of future results. All investments carry a certain degree of risk, including the possible loss of principal, and there is no assurance that an investment will provide positive performance over any period of time. Certain products and services may not be available to all entities or persons. There is no guarantee that investment objectives will be achieved. See the applicable product literature for details.
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.
Investing in fixed income investments involves risks such as market risk, credit risk, interest rate/duration risk, call risk, tax risk, political risk, economic risk, and income risk. Typically the value of, and income generated by, fixed income investments will decrease or increase based on changes in market interest rates. As interest rates rise, bond prices fall and as interest rates fall, bond prices rise. Income is only one component of performance and investors should consider all of the risk factors for an asset class before investing. Credit risk refers to an issuers ability to make interest and principal payments when due, as well as the prices of bonds declining when an issuer’s credit quality is expected to deteriorate.
Municipal Bond Income is generally exempt from regular federal income tax and may be subject to state and local taxes, based on the investor’s state of residence, as well as to the federal alternative minimum tax (AMT). Capital gains, if any, are subject to tax. Income from municipal bonds could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. Please contact a tax advisor regarding the suitability of tax-exempt investments as this information should not replace a client's consultation with a financial/tax professional regarding their tax situation. Nuveen and its investment specialists do not provide tax advice.
Equity investments are subject to market risk or the risk that stocks will decline in response to such factors as adverse company news or industry developments or a general economic decline.
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.
Before investing, carefully consider fund investment objectives, risks, charges and expenses. For this and other information that should be read carefully, please request a prospectus or summary prospectus from your financial professional or Nuveen at 800.257.8787 or visit nuveen.com
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