Nushares ETF Trust
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Exchange-Traded
Funds |
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28
February 2023 |
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Listing
Exchange |
Ticker
Symbol |
Fund
Name |
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Nuveen
ESG International Developed Markets Equity ETF |
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Cboe
BZX Exchange, Inc. |
NUDM |
Nuveen
ESG Emerging Markets Equity ETF |
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Cboe
BZX Exchange, Inc. |
NUEM |
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The
Securities and Exchange Commission (“SEC”)
has not approved or disapproved these securities or passed upon the
adequacy of this prospectus. Any representation to the contrary is a
criminal offense. |
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Prospectus |
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NOT
FDIC OR GOVERNMENT INSURED MAY
LOSE VALUE NO
BANK GUARANTEE |
Section
1
Fund Summaries
Nuveen
ESG International Developed Markets Equity
ETF
Investment
Objective
Nuveen
ESG International Developed Markets Equity ETF (the “Fund”)
seeks to track the investment results, before fees and expenses, of the TIAA ESG
International Developed Markets Equity Index (the “Index”).
Fees
and Expenses of the Fund
The
table below describes the fees and expenses that you may pay if you buy, hold
and sell shares of the Fund. You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, when buying or selling
shares of the Fund, which are not reflected in this table or the example that
follows:
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
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Management
Fees |
0.30% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.01% |
Total
Annual Fund Operating Expenses |
0.31% |
Example
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 in the Fund for the time periods indicated and then sell all your
shares at the end of a period. The example also assumes that your investment has
a 5% return each year and that the Fund’s operating expenses remain the same.
The example does not reflect brokerage commissions that you may pay when you
purchase and sell Fund shares. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
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1
Year |
$32 |
3
Years |
$100 |
5
Years |
$174 |
10
Years |
$393 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
During the most recent fiscal year, the Fund's portfolio turnover rate was
62% of the average value of its
portfolio.
Principal
Investment Strategies
The
Fund seeks to track the investment results of the Index, which is comprised
solely of listed equity securities issued by companies (and depositary receipts
representing such securities) located in countries with developed markets,
excluding the United States and Canada, that meet certain environmental, social,
and governance (“ESG”)
criteria. The Index selects from the securities included in the MSCI EAFE Index
(the “Base
Index”),
which currently consists of large- and mid-capitalization companies located in
one of the following 21 developed market countries: Australia, Austria, Belgium,
Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden,
Switzerland, and the United Kingdom. Securities in the Base Index are weighted
based on market capitalization. MSCI Inc. (“MSCI”)
is the index provider for the Index and the Base Index. The Index and the Base
Index are owned, calculated and controlled by MSCI, in its sole discretion.
Neither the Fund’s investment adviser, sub-adviser nor their affiliates has any
discretion to select Index components or change the Index methodology.
The
Index identifies equity securities from the Base Index that satisfy certain ESG
criteria, based on ESG performance data collected by MSCI ESG Research, Inc., an
affiliate of the index provider. ESG performance is measured on an
industry-specific basis, with assessment categories varying by industry.
Companies are scored and ranked against industry peers using a consistent set of
key performance indicators to determine relative ESG strength.
Environmental
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2 |
Section
1
Fund Summaries |
assessment
categories can include how a company is addressing climate change, natural
resource use, and waste management and emission management. Social evaluation
categories can include a company’s relations with employees and suppliers,
product safety and sourcing practices. Governance assessment categories can
include governance practices and business ethics. The ESG criteria also consider
how well a company adheres to national and international laws and regulations
related to ESG matters. Index rules exclude companies with significant
activities in the following controversial businesses: alcohol production,
tobacco production, nuclear power, gambling, and weapons and firearms
production. Companies otherwise eligible for inclusion in the Index that exceed
certain carbon-based ownership and emissions thresholds are excluded from the
Index.
Companies
that are not excluded by the ESG criteria are then ranked within their
respective sectors based on their ESG performance score. The highest ranked
companies in each sector are identified as eligible for inclusion in the Index
until such point that the aggregate weight of companies in the sector reaches
50% of the market cap of such sector in the Base Index. For example, if the
market capitalization of all consumer discretionary sector companies included in
the Base Index totals $200 billion, then the Index would screen these consumer
discretionary sector companies, rank them based on ESG performance scores, and
add the highest scoring companies to the Index until such point that their
combined total market capitalization reaches $100 billion. Those companies
identified as eligible for inclusion in the Index are market capitalization
weighted within their respective sectors. Once the universe of eligible Index
components is established, the Index optimizes the market cap weightings of
individual components to approximate the sector weightings of the Base Index,
within certain constraints established by the Index. As of the date of this
prospectus, a significant portion of the Index is comprised of companies in the
financial services and industrials
sectors.
In
seeking to track the investment results of the Index, the Fund attempts to
replicate the Index by investing all, or substantially all, of its assets in the
securities represented in the Index in approximately the same proportions as the
Index. The
Index is normally rebalanced and reconstituted quarterly in February, May,
August, and November. The
Index may also remove a security at any time in response to a corporate event
such as bankruptcy, delisting, merger or acquisition that causes the security to
become ineligible for inclusion in the Index. The Fund makes changes to its
portfolio shortly after any Index changes are made public. As of December 31,
2022, the Index was comprised of 796
securities.
Under
normal market conditions, the Fund invests at least 80% of the sum of its net
assets and the amount of any borrowings for investment purposes in component
securities of the Index
and depositary receipts representing securities in the Index.
To
the extent the Index concentrates (i.e.,
holds 25% or more of its total assets) in the securities of companies in a
particular industry or group of industries, the Fund will concentrate its
investments to approximately the same extent as the Index.
Principal
Risks
You could lose money by investing in the
Fund. An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks of investing in the Fund listed below are presented
alphabetically to facilitate your ability to find particular risks and compare
them with the risks of other funds. Each risk summarized below is considered a
“principal risk” of investing in the Fund, regardless of the order in which it
appears.
Concentration
Risk—To
the extent that the Fund’s portfolio is concentrated in the securities of
issuers in a particular market, industry, group of industries or sector, the
Fund may be adversely affected by the performance of those securities, may be
subject to increased price volatility and may be more susceptible to adverse
economic, market, political or regulatory occurrences affecting that market,
industry, group of industries or sector.
Currency
Risk—Changes
in currency exchange rates will affect the value of non-U.S. dollar
denominated securities, the value of dividends and interest earned from
such securities, and gains and losses realized on the sale of such securities. A
strong U.S. dollar relative to these other currencies will adversely affect the
value of the Fund’s portfolio.
Cybersecurity
Risk—Cybersecurity
risk is the risk of an unauthorized breach and access to Fund assets, customer
data (including private shareholder information), or proprietary information, or
the risk of an incident occurring that causes the Fund, its investment adviser
or sub-adviser, custodian, transfer agent, distributor or other service provider
or a financial intermediary to suffer a data breach, data corruption or lose
operational functionality. Successful cyber-attacks or other cyber-failures or
events affecting the Fund or its service providers may adversely impact the Fund
or its shareholders. Additionally, a cybersecurity breach could affect the
issuers in which the Fund invests, which may cause the Fund’s investments to
lose value.
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Section
1
Fund Summaries |
3 |
Equity
Security Risk—Equity
securities in the Fund’s portfolio may decline significantly in price over short
or extended periods of time, and such declines may occur because of declines in
the equity market as a whole, or because of declines in only a particular
country, company, industry, or sector of the market. From
time to time, the Fund may invest a significant portion of its assets in
companies in one or more related sectors or industries which would make the Fund
more vulnerable to adverse developments affecting such sectors or
industries.
ESG
Strategy Risk—Because
the Fund’s ESG investment strategy will exclude securities of certain issuers
for non-financial reasons based on the ESG criteria of the Index (i.e.,
companies that do not demonstrate sustainable ESG characteristics or are
involved in certain prohibited activities), the Fund may forgo some market
opportunities available to funds that do not use an ESG investment strategy or
may be required to sell a security when it might otherwise be disadvantageous to
do so. This may cause the Fund to underperform the stock market as a whole or
other funds that do not use an ESG investment strategy. In addition, there is a
risk that the companies identified by the Fund’s ESG investment strategy will
not operate as expected when addressing ESG issues or they will not exhibit
positive ESG characteristics as intended. There are also significant differences
in interpretations of what it means for a company to have positive ESG
characteristics. As a result, the factors and criteria considered when
generating ESG data and the results of such ESG research generally differ across
ESG data providers. Further, in selecting companies for inclusion in the Index,
the index provider relies on information and ESG performance data from an
affiliated research provider, which could be incomplete or erroneous, which in
turn could cause the index provider to assess a company’s ESG characteristics
incorrectly. Furthermore, because ESG considerations are still an emerging area
of investment focus, data availability and reporting with respect to ESG
criteria may not always be available or may become
unreliable.
Financial
Services Sector Risk—The
Fund currently invests a significant portion of its assets in the financial
services sector, although this may change over time. Financial services
companies are particularly sensitive to the adverse effects of economic
recession; changes in government regulation; the availability of capital;
volatile interest rates; and the health of the commercial and residential real
estate markets.
Foreign
Investment Risk—Non-U.S.
issuers or U.S. issuers with significant non-U.S. operations may be subject to
risks in addition to those of issuers located in or that principally operate in
the United States as a result of, among other things, political, social and
economic developments abroad and different legal, regulatory and tax
environments. Foreign investments may also have lower liquidity and be more
difficult to value than investments in U.S. issuers. To the extent the Fund
invests a significant portion of its assets in the securities of companies in a
single country or region, it may be more susceptible to adverse conditions
affecting that country or region. Foreign investments may also be subject to
risk of loss because of more or less foreign government regulation, less public
information, less stringent investor protections and less stringent accounting,
corporate governance, financial reporting and disclosure standards.
Geographic
Concentration Risk—To
the extent the Fund invests a significant portion of its assets in the
securities of companies in a single country or region and/or the depositary
receipts representing such securities, it may be more susceptible to adverse
economic, market, political or regulatory events or conditions affecting that
country or region. The Fund currently invests a significant portion of its
assets in companies located in Japan and Europe, particularly the United
Kingdom, although this may change over
time.
Index
Provider Risk—There
is no assurance that the Index will be determined, maintained, constructed,
reconstituted, rebalanced, composed, calculated or disseminated accurately. To
correct any such error, an index provider may carry out an unscheduled rebalance
or other modification of the Index constituents or weightings, which may
increase the Fund’s costs. Unusual market conditions may cause an index
provider to postpone a scheduled rebalance. Such a postponement in a time of
market volatility could mean a constituent that would otherwise be removed at
rebalance may remain, causing the performance and constituents of the index to
vary from those expected under normal conditions. Index providers generally do
not provide any representation or warranty in relation to the quality, accuracy
or completeness of data in the indexes in which they license, and generally do
not guarantee that an index will be calculated in accordance with its stated
methodology. Losses or costs associated with any index provider errors generally
will be borne by the Fund and its
shareholders.
Industrials
Sector Risk—The
Fund currently invests a significant portion of its assets in the industrials
sector, although this may change over time. Industrials companies are affected
by various factors, including the general state of the economy, exchange rates,
commodity prices, intense competition, consolidation, domestic and international
politics, government regulation, import controls, excess capacity, consumer
demand and spending trends. In addition, industrials companies may also be
significantly affected by overall capital spending levels, economic cycles,
rapid technological changes, delays in modernization, labor relations,
environmental liabilities, governmental and product liability and e-commerce
initiatives.
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4 |
Section
1
Fund Summaries |
Investment
Style Risk—The
Fund invests in the securities included in, or representative of, the Index
regardless of their investment merit. The Fund does not attempt to outperform
the Index or take defensive positions in declining markets or in response to
changing market conditions. As a result, the Fund’s performance may be adversely
affected by a general decline in the market segments relating to the Index. In
addition, because the Index selects securities for inclusion based on ESG
criteria, the Fund may forgo some market opportunities available to funds that
do not use these criteria.
Market
Trading Risks—The
Fund is an exchange-traded fund (“ETF”),
and as with all ETFs, Fund shares may be bought and sold in the secondary market
at market prices. Although it is expected that the market price of a Fund share
typically will approximate its net asset value (“NAV”),
there may be times when the market price and the NAV diverge more significantly,
particularly in times of market volatility or steep market declines. Thus, you
may pay more or less than NAV when you buy Fund shares on the secondary market,
and you may receive more or less than NAV when you sell those shares. In
addition, the Funds’ underlying portfolio holdings trade on foreign exchanges
that may be closed when the national securities exchange on which the Fund’s
shares trade is open (and vice versa), which may result in larger differences
between the Fund’s NAV and its market price than those experienced by ETFs that
invest in domestic securities. Although the Fund’s shares are listed for trading
on a national securities exchange, it is possible that an active trading market
may not develop or be maintained, in which case transactions may occur at wider
bid/ask spreads (which may be especially pronounced for smaller funds). Trading
of the Fund’s shares may be halted by the activation of individual or
market-wide trading halts (which halt trading for a specific period of time when
the price of a particular security or overall market prices decline by a
specified percentage). In times of market stress, the Fund’s underlying
portfolio holdings may become less liquid, which in turn may affect the
liquidity of the Fund’s shares and/or lead to more significant differences
between the Fund’s market price and its NAV. Market makers are under no
obligation to make a market in the Fund’s shares, and authorized participants
are not obligated to submit purchase or redemption orders for the Fund’s shares.
In the event market makers cease making a market in the Fund’s shares or
authorized participants stop submitting creation or redemption orders, Fund
shares may trade at a larger premium or discount to
NAV.
Mid-Cap
Company Risk—Securities
of mid-cap companies may be subject to more abrupt or erratic market movements
than those of larger, more established companies or broader market averages in
general.
Service
Provider Operational Risk—The
Fund’s service providers, such as the Fund’s administrator, custodian or
transfer agent, may experience disruptions or operating errors that could
negatively impact the Fund. Although service providers are required to have
appropriate operational risk management policies and procedures, and to take
appropriate precautions to avoid and mitigate risks that could lead to
disruptions and operating errors, it may not be possible to identify all of the
operational risks that may affect the Fund or to develop processes and controls
to completely eliminate or mitigate their occurrence or
effects.
Tracking
Error Risk—Tracking
error is the divergence of the Fund’s performance from that of the Index.
Tracking error may occur because of, for example, pricing differences,
transaction costs, the Fund’s holding of uninvested cash, differences in timing
of the accrual of distributions, changes to the Index or the need to meet
various new or existing regulatory requirements. This risk may be heightened
during times of increased market volatility or other unusual market conditions.
Tracking error also may result because the Fund incurs fees and expenses, but
the Index does not.
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Section
1
Fund Summaries |
5 |
Fund
Performance
The
following bar chart and table provide some indication of the potential risks of
investing in the Fund. Both the bar chart and the table assume that all
distributions have been reinvested. The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available at www.nuveen.com/etf
or by calling (800)
257-8787.
During
the period reflected in the bar chart above, the Fund’s highest and lowest quarterly returns
were 17.51% and -21.73%, respectively, for the quarters ended
December 31, 2020 and
March 31,
2020.
The
table below shows the variability of the Fund’s average annual returns and how
they compare over the time periods indicated with those of a broad measure of
market performance and the Index. All after-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your own actual after-tax returns will depend on your specific tax situation and
may differ from what is shown here. After-tax returns are not
relevant to investors who hold Fund shares in tax-deferred accounts such as IRAs
or employer-sponsored retirement
plans.
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Average Annual
Total Returns for the Periods
Ended December 31,
2022 |
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Inception
Date |
1
Year |
5
Year |
Since Inception |
NUDM
(return before taxes) |
06/06/17 |
-15.08% |
1.92% |
3.21% |
NUDM
(return after taxes on distributions) |
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-15.33% |
1.34% |
2.66% |
NUDM
(return after taxes on distributions and sale of Fund shares) |
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-8.51% |
1.54% |
2.54% |
MSCI
EAFE Index (reflects no deduction for taxes or sales loads) |
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-14.45% |
1.54% |
2.93% |
TIAA
ESG International Developed Markets Equity Index (reflects no deduction
for fees, expenses or taxes) |
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-14.94% |
2.18% |
3.49% |
Management
Investment
Adviser
Nuveen
Fund Advisors, LLC
Sub-Adviser
Teachers
Advisors, LLC
Portfolio
Managers
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Name |
Title |
Portfolio
Manager of Fund Since |
Philip
James (Jim) Campagna, CFA |
Managing
Director |
June
2017 |
Lei
Liao, CFA |
Managing
Director |
June
2017 |
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6 |
Section
1
Fund Summaries |
Purchase
and Sale of Fund Shares
The
Fund is an ETF. Shares of the Fund are listed on a national securities exchange
and can only be bought and sold in the secondary market through a broker-dealer
at market prices. Because Fund shares trade at market prices rather than NAV,
shares may trade at a price greater than NAV (at a “premium”)
or less than NAV (at a “discount”).
An investor may also incur costs attributable to the difference between the
highest price a buyer is willing to pay to purchase Fund shares (bid) and the
lowest price a seller is willing to accept for Fund shares (ask) when buying and
selling shares in the secondary market (the “bid/ask
spread”).
Recent information regarding the Fund, including its NAV, market price, premiums
and discounts, and bid/ask spreads, is available on the Fund’s website at
www.nuveen.com/etf.
Tax
Information
The
Fund’s distributions are taxable and will generally be taxed as ordinary income
or capital gains, unless you are investing through a tax-deferred account, such
as an individual retirement account (“IRA”)
or 401(k) plan (in which case you may be taxed upon withdrawal of your
investment from such account).
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank or financial advisor), the Fund’s investment
adviser or its affiliates may pay the intermediary for marketing activities and
presentations, educational training programs, conferences, the development of
technology platforms and reporting systems or other services related to the sale
or promotion of Fund shares. These payments may create a conflict of interest by
influencing the broker-dealer or other financial intermediary and your
salesperson to recommend the Fund over another investment. Ask your salesperson
or visit your financial intermediary’s website for more information.
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Section
1
Fund Summaries |
7 |
Nuveen
ESG Emerging Markets Equity ETF
Investment
Objective
Nuveen
ESG Emerging Markets Equity ETF (the “Fund”)
seeks to track the investment results, before fees and expenses, of the TIAA ESG
Emerging Markets Equity Index (the “Index”).
Fees
and Expenses of the Fund
The
table below describes the fees and expenses that you may pay if you buy, hold
and sell shares of the Fund. You may pay other fees, such as brokerage
commissions and other fees to financial intermediaries, when buying or selling
shares of the Fund, which are not reflected in this table or the example that
follows:
Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment)
|
|
Management
Fees |
0.35% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.01% |
Total
Annual Fund Operating Expenses |
0.36% |
Example
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 in the Fund for the time periods indicated and then sell all your
shares at the end of a period. The example also assumes that your investment has
a 5% return each year and that the Fund’s operating expenses remain the same.
The example does not reflect brokerage commissions that you may pay when you
purchase and sell Fund shares. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
|
|
1
Year |
$37 |
3
Years |
$116 |
5
Years |
$202 |
10
Years |
$456 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
During the most recent fiscal year, the Fund's portfolio turnover rate was
63% of the average value of its
portfolio.
Principal
Investment Strategies
The
Fund seeks to track the investment results of the Index, which is comprised
solely of listed equity securities issued by companies (and depositary receipts
representing such securities) located in countries with emerging markets that
meet certain environmental, social, and governance (“ESG”)
criteria. The Index selects from the securities included in the MSCI Emerging
Markets Index (the “Base
Index”),
which currently consists of large- and mid-capitalization companies located in
one of the following 26 emerging market countries: Argentina, Brazil, Chile,
China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia,
Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia,
Saudi Arabia, South Africa, Taiwan, Thailand, Turkey, and the United Arab
Emirates. Securities in the Base Index are weighted based on market
capitalization. MSCI Inc. (“MSCI”),
is the index provider for the Index and the Base Index. The Index and the Base
Index are owned, calculated and controlled by MSCI, in its sole discretion.
Neither the Fund’s investment adviser, sub-adviser nor their affiliates has any
discretion to select Index components or change the Index methodology.
The
Index identifies equity securities from the Base Index that satisfy certain ESG
criteria, based on ESG performance data collected by MSCI ESG Research, Inc., an
affiliate of the index provider. ESG performance is measured on an
industry-specific basis, with assessment categories varying by industry.
Companies are scored and ranked against industry peers using a consistent set of
key performance indicators to determine relative ESG strength. Environmental
assessment categories can include how a company is addressing climate change,
natural resource use, and waste management and emission management. Social
evaluation categories can include a company’s relations with employees and
suppliers, product safety and sourcing practices. Governance assessment
categories can include governance practices and business ethics. The ESG
criteria also consider how well a company adheres to national and
international
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8 |
Section
1
Fund Summaries |
laws
and regulations related to ESG matters. Index rules exclude companies with
significant activities in the following controversial businesses: alcohol
production, tobacco production, nuclear power, gambling, and weapons and firearm
production. Companies otherwise eligible for inclusion in the Index that exceed
certain carbon-based ownership and emissions thresholds are excluded from the
Index.
Companies
that are not excluded by the ESG criteria are then ranked within their
respective sectors based on their ESG performance score. The highest ranked
companies in each sector are identified as eligible for inclusion in the Index
until such point that the aggregate weight of companies in the sector reaches
50% of the market cap of such sector in the Base Index. For example, if the
market capitalization of all consumer discretionary sector companies included in
the Base Index totals $200 billion, then the Index would screen these consumer
discretionary sector companies, rank them based on ESG performance scores, and
add the highest scoring companies to the Index until such point that their
combined total market capitalization reaches $100 billion. Those companies
identified as eligible for inclusion in the Index are market capitalization
weighted within their respective sectors. Once the universe of eligible Index
components is established, the Index optimizes the market cap weightings of
individual components to approximate the sector weightings of the Base Index,
within certain constraints established by the Index. As of the date of this
prospectus, a significant portion of the Index is comprised of companies in the
financial services and information technology
sectors.
In
seeking to track the investment results of the Index, the Fund attempts to
replicate the Index by investing all, or substantially all, of its assets in the
securities represented in the Index in approximately the same proportions as the
Index. The
Index is normally rebalanced and reconstituted quarterly in February, May,
August, and November. The
Index may also remove a security at any time in response to a corporate event
such as bankruptcy, delisting, merger or acquisition that causes the security to
become ineligible for inclusion in the Index. The Fund makes changes to its
portfolio shortly after any Index changes are made public. As of December 31,
2022, the Index was comprised of 1,377
securities.
Under
normal market conditions, the Fund invests at least 80% of the sum of its net
assets and the amount of any borrowings for investment purposes in component
securities of the Index and depositary receipts representing securities in the
Index. To the extent the Index concentrates (i.e.,
holds 25% or more of its total assets) in the securities of companies in a
particular industry or group of industries, the Fund will concentrate its
investments to approximately the same extent as the Index.
Principal
Risks
You could lose money by investing in the
Fund. An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. The
principal risks of investing in the Fund listed below are presented
alphabetically to facilitate your ability to find particular risks and compare
them with the risks of other funds. Each risk summarized below is considered a
“principal risk” of investing in the Fund, regardless of the order in which it
appears.
Concentration
Risk—To
the extent that the Fund’s portfolio is concentrated in the securities of
issuers in a particular market, industry, group of industries or sector, the
Fund may be adversely affected by the performance of those securities, may be
subject to increased price volatility and may be more susceptible to adverse
economic, market, political or regulatory occurrences affecting that market,
industry, group of industries or sector.
Currency
Risk—Changes
in currency exchange rates will affect the value of non-U.S. dollar
denominated securities, the value of dividends and interest earned from
such securities, and gains and losses realized on the sale of such securities. A
strong U.S. dollar relative to these other currencies will adversely affect the
value of the Fund’s portfolio.
Cybersecurity
Risk—Cybersecurity
risk is the risk of an unauthorized breach and access to Fund assets, customer
data (including private shareholder information), or proprietary information, or
the risk of an incident occurring that causes the Fund, its investment adviser
or sub-adviser, custodian, transfer agent, distributor or other service provider
or a financial intermediary to suffer a data breach, data corruption or lose
operational functionality. Successful cyber-attacks or other cyber-failures or
events affecting the Fund or its service providers may adversely impact the Fund
or its shareholders. Additionally, a cybersecurity breach could affect the
issuers in which the Fund invests, which may cause the Fund’s investments to
lose value.
Emerging
Markets Risk—The
risk of foreign investment often increases in countries with emerging markets or
that are otherwise economically tied to emerging market countries. For example,
these countries may have more unstable governments than developed countries and
their economies may be based on only a few industries. Emerging market countries
may also have less stringent regulation of accounting, auditing, financial
reporting and recordkeeping requirements, which would affect the Fund’s ability
to evaluate potential portfolio companies. As a result, there could be
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Section
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Fund Summaries |
9 |
less
information about issuers in emerging market countries, which could negatively
affect the ability of the Fund’s sub-adviser to evaluate local companies or
their potential impact on the Fund’s performance. Because their financial
markets may be very small, prices of financial instruments in emerging market
countries may be volatile and difficult to determine. Financial instruments of
issuers in these countries may have lower overall liquidity than those of
issuers in more developed countries. In addition, foreign investors such as the
Fund are subject to a variety of special restrictions in many emerging market
countries. Shareholder claims and regulatory actions that are available in the
U.S. may be difficult or impossible to pursue in emerging market
countries.
Equity
Security Risk—Equity
securities in the Fund’s portfolio may decline significantly in price over short
or extended periods of time, and such declines may occur because of declines in
the equity market as a whole, or because of declines in only a particular
country, company, industry, or sector of the market. From
time to time, the Fund may invest a significant portion of its assets in
companies in one or more related sectors or industries which would make the Fund
more vulnerable to adverse developments affecting such sectors or
industries.
ESG
Strategy Risk—Because
the Fund’s ESG investment strategy will exclude securities of certain issuers
for non-financial reasons based on the ESG criteria of the Index (i.e.,
companies that do not demonstrate sustainable ESG characteristics or are
involved in certain prohibited activities), the Fund may forgo some market
opportunities available to funds that do not use an ESG investment strategy or
may be required to sell a security when it might otherwise be disadvantageous to
do so. This may cause the Fund to underperform the stock market as a whole or
other funds that do not use an ESG investment strategy. In addition, there is a
risk that the companies identified by the Fund’s ESG investment strategy will
not operate as expected when addressing ESG issues or they will not exhibit
positive ESG characteristics as intended. There are also significant differences
in interpretations of what it means for a company to have positive ESG
characteristics. As a result, the factors and criteria considered when
generating ESG data and the results of such ESG research generally differ across
ESG data providers. Further, in selecting companies for inclusion in the Index,
the index provider relies on information and ESG performance data from an
affiliated research provider, which could be incomplete or erroneous, which in
turn could cause the index provider to assess a company’s ESG characteristics
incorrectly. Furthermore, because ESG considerations are still an emerging area
of investment focus, data availability and reporting with respect to ESG
criteria may not always be available or may become
unreliable.
Financial
Services Sector Risk—The
Fund currently invests a significant portion of its assets in the financial
services sector, although this may change over time. Financial services
companies are particularly sensitive to the adverse effects of economic
recession; changes in government regulation; the availability of capital;
volatile interest rates; and the health of the commercial and residential real
estate markets.
Foreign
Investment Risk—Non-U.S.
issuers or U.S. issuers with significant non-U.S. operations may be subject to
risks in addition to those of issuers located in or that principally operate in
the United States as a result of, among other things, political, social and
economic developments abroad and different legal, regulatory and tax
environments. Foreign investments may also have lower liquidity and be more
difficult to value than investments in U.S. issuers. To the extent the Fund
invests a significant portion of its assets in the securities of companies in a
single country or region, it may be more susceptible to adverse conditions
affecting that country or region. Foreign investments may also be subject to
risk of loss because of more or less foreign government regulation, less public
information, less stringent investor protections and less stringent accounting,
corporate governance, financial reporting and disclosure standards. The Fund
currently invests a significant portion of its assets in companies located in
China and India, although this may change over time. The Fund's investments in
China include companies operated through legal structures known as variable
interest entities ("VIEs"),
which are not formally recognized under Chinese law and are subject to the risk,
among others, that China could cease to allow VIEs at any time or impose new
restrictions on the structure, either of which could result in significant
economic losses to the
Fund.
Geographic
Concentration Risk—To
the extent the Fund invests a significant portion of its assets in the
securities of companies in a single country or region and/or the depositary
receipts representing such securities, it may be more susceptible to adverse
economic, market, political or regulatory events or conditions affecting that
country or region. The Fund currently invests a significant portion of its
assets in companies located in China, India and other Asian countries, although
this may change over
time.
Index
Provider Risk—There
is no assurance that the Index will be determined, maintained, constructed,
reconstituted, rebalanced, composed, calculated or disseminated accurately. To
correct any such error, an index provider may carry out an unscheduled rebalance
or other modification of the Index constituents or weightings, which may
increase the Fund’s costs. Unusual market conditions may cause an index
provider to postpone a scheduled rebalance. Such a postponement in a time of
market volatility could mean a constituent that would otherwise be removed at
rebalance may remain, causing
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|
10 |
Section
1
Fund Summaries |
the
performance and constituents of the index to vary from those expected under
normal conditions. Index providers generally do not provide any representation
or warranty in relation to the quality, accuracy or completeness of data in the
indexes in which they license, and generally do not guarantee that an index will
be calculated in accordance with its stated methodology. Losses or costs
associated with any index provider errors generally will be borne by the Fund
and its shareholders.
Information
Technology Sector Risk—The
Fund currently invests a significant portion of its assets in the information
technology sector, although this may change over time. The information
technology sector can be significantly affected by changes in, among other
things, the supply and demand for specific products and services, the pace of
technological development and product obsolescence, market competition,
government regulation, and patent and intellectual property
rights.
Investment
Style Risk—The
Fund invests in the securities included in, or representative of, the Index
regardless of their investment merit. The Fund does not attempt to outperform
the Index or take defensive positions in declining markets or in response to
changing market conditions. As a result, the Fund’s performance may be adversely
affected by a general decline in the market segments relating to the Index. In
addition, because the Index selects securities for inclusion based on ESG
criteria, the Fund may forgo some market opportunities available to funds that
do not use these criteria.
Market
Trading Risks—The
Fund is an exchange-traded fund (“ETF”),
and as with all ETFs, Fund shares may be bought and sold in the secondary market
at market prices. Although it is expected that the market price of a Fund share
typically will approximate its net asset value (“NAV”),
there may be times when the market price and the NAV diverge more significantly,
particularly in times of market volatility or steep market declines. Thus, you
may pay more or less than NAV when you buy Fund shares on the secondary market,
and you may receive more or less than NAV when you sell those shares. In
addition, the Funds’ underlying portfolio holdings trade on foreign exchanges
that may be closed when the national securities exchange on which the Fund’s
shares trade is open (and vice versa), which may result in larger differences
between the Fund’s NAV and its market price than those experienced by ETFs that
invest in domestic securities. Although the Fund’s shares are listed for trading
on a national securities exchange, it is possible that an active trading market
may not develop or be maintained, in which case transactions may occur at wider
bid/ask spreads (which may be especially pronounced for smaller funds). Trading
of the Fund’s shares may be halted by the activation of individual or
market-wide trading halts (which halt trading for a specific period of time when
the price of a particular security or overall market prices decline by a
specified percentage). In times of market stress, the Fund’s underlying
portfolio holdings may become less liquid, which in turn may affect the
liquidity of the Fund’s shares and/or lead to more significant differences
between the Fund’s market price and its NAV. Market makers are under no
obligation to make a market in the Fund’s shares, and authorized participants
are not obligated to submit purchase or redemption orders for the Fund’s shares.
In the event market makers cease making a market in the Fund’s shares or
authorized participants stop submitting creation or redemption orders, Fund
shares may trade at a larger premium or discount to
NAV.
Mid-Cap
Company Risk—Securities
of mid-cap companies may be subject to more abrupt or erratic market movements
than those of larger, more established companies or broader market averages in
general.
Service
Provider Operational Risk—The
Fund’s service providers, such as the Fund’s administrator, custodian or
transfer agent, may experience disruptions or operating errors that could
negatively impact the Fund. Although service providers are required to have
appropriate operational risk management policies and procedures, and to take
appropriate precautions to avoid and mitigate risks that could lead to
disruptions and operating errors, it may not be possible to identify all of the
operational risks that may affect the Fund or to develop processes and controls
to completely eliminate or mitigate their occurrence or
effects.
Tracking
Error Risk—Tracking
error is the divergence of the Fund’s performance from that of the Index.
Tracking error may occur because of, for example, pricing differences,
transaction costs, the Fund’s holding of uninvested cash, differences in timing
of the accrual of distributions, changes to the Index or the need to meet
various new or existing regulatory requirements. This risk may be heightened
during times of increased market volatility or other unusual market conditions.
Tracking error also may result because the Fund incurs fees and expenses, but
the Index does not.
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Section
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11 |
Fund
Performance
The
following bar chart and table provide some indication of the potential risks of
investing in the Fund. Both the bar chart and the table assume that all
distributions have been reinvested. The Fund’s past performance
(before and after taxes) is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available at www.nuveen.com/etf
or by calling (800)
257-8787.
During
the period reflected in the bar chart above, the Fund’s highest and lowest quarterly returns
were 20.21% and -22.42%, respectively, for the quarters ended
December 31, 2020 and
March 31,
2020.
The
table below shows the variability of the Fund’s average annual returns and how
they compare over the time periods indicated with those of a broad measure of
market performance and the Index. All after-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Your own actual after-tax returns will depend on your specific tax situation and
may differ from what is shown here. After-tax returns are not
relevant to investors who hold Fund shares in tax-deferred accounts such as IRAs
or employer-sponsored retirement
plans.
|
|
|
|
|
|
|
Average Annual
Total Returns for the Periods
Ended December 31,
2022 |
|
Inception
Date |
1
Year
|
5
Year
|
Since Inception |
NUEM
(return before taxes) |
06/06/17 |
-19.25% |
-0.80% |
2.23% |
NUEM
(return after taxes on distributions) |
|
-19.59% |
-1.24% |
1.78% |
NUEM
(return after taxes on distributions and sale of Fund shares) |
|
-11.12% |
-0.58% |
1.74% |
MSCI
Emerging Markets Index (reflects no deduction for taxes or sales
loads) |
|
-20.09% |
-1.40% |
1.38% |
TIAA
ESG Emerging Markets Equity Index (reflects no deduction for fees,
expenses or taxes) |
|
-18.74% |
-0.05% |
3.01% |
Management
Investment
Adviser
Nuveen
Fund Advisors, LLC
Sub-Adviser
Teachers
Advisors, LLC
Portfolio
Managers
|
|
|
Name |
Title |
Portfolio
Manager of Fund Since |
Philip
James (Jim) Campagna, CFA |
Managing
Director |
June
2017 |
Lei
Liao, CFA |
Managing
Director |
June
2017 |
|
|
12 |
Section
1
Fund Summaries |
Purchase
and Sale of Fund Shares
The
Fund is an ETF. Shares of the Fund are listed on a national securities exchange
and can only be bought and sold in the secondary market through a broker-dealer
at market prices. Because Fund shares trade at market prices rather than NAV,
shares may trade at a price greater than NAV (at a “premium”)
or less than NAV (at a “discount”).
An investor may also incur costs attributable to the difference between the
highest price a buyer is willing to pay to purchase Fund shares (bid) and the
lowest price a seller is willing to accept for Fund shares (ask) when buying and
selling shares in the secondary market (the “bid/ask
spread”).
Recent information regarding the Fund, including its NAV, market price, premiums
and discounts, and bid/ask spreads, is available on the Fund’s website at
www.nuveen.com/etf.
Tax
Information
The
Fund’s distributions are taxable and will generally be taxed as ordinary income
or capital gains, unless you are investing through a tax-deferred account, such
as an individual retirement account (“IRA”)
or 401(k) plan (in which case you may be taxed upon withdrawal of your
investment from such account).
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank or financial advisor), the Fund’s investment
adviser or its affiliates may pay the intermediary for marketing activities and
presentations, educational training programs, conferences, the development of
technology platforms and reporting systems or other services related to the sale
or promotion of Fund shares. These payments may create a conflict of interest by
influencing the broker-dealer or other financial intermediary and your
salesperson to recommend the Fund over another investment. Ask your salesperson
or visit your financial intermediary’s website for more information.
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Section
1
Fund Summaries |
13 |
Section
2
Additional Detail About the Funds’ Strategies, Holdings and Risks
This
prospectus contains important information about investing in the Funds. Please
read this prospectus carefully before you make any investment decisions.
Additional information regarding the Funds is available at www.nuveen.com/etf or
by calling Nuveen Investor Services at (888) 290-9881.
Each
Fund is designed to track an index that is not representative of the market as a
whole. Each Fund is designed to be used as part of a broader asset allocation
strategy, and thus an investment in a Fund should not be considered a complete
investment program.
Each
Index is a theoretical financial calculation, whereas a Fund is an actual
investment portfolio. The performance of a Fund and its Index may vary for a
number of reasons, including transaction costs, asset valuations, corporate
actions (such as mergers and spin-offs), and differences between a Fund’s
portfolio and its Index resulting from legal restrictions (such as tax
diversification requirements) that apply to the Fund but not to the Index. On an
annual basis, each Fund’s tracking error (i.e.,
the divergence of a Fund’s performance from that of its Index) is generally
expected to be less than 5%.
|
Investment
Objectives and Principal Investment
Strategies |
Each
Fund’s investment objective, which is described in the “Fund Summaries” section,
may be changed by the Fund’s Board of Trustees (the “Board”)
without shareholder approval.
Each
Fund’s investment policies may be changed by the Board without shareholder
approval unless otherwise noted in this prospectus or the statement of
additional information.
Each
Fund has adopted policies whereby, under normal market conditions, it will
invest at least 80% of the sum of its net assets and the amount of any
borrowings for investment purposes in component securities of its Index and in
depositary receipts representing securities in its Index (the “Name
Policy”).
If the Name Policy changes, you will be notified at least 60 days in advance.
Each Fund may consider both direct investments and indirect investments
(e.g.,
investments in other investment companies, derivatives and synthetic instruments
with economic characteristics similar to the direct investments that meet the
Name Policy) when determining compliance with the Name Policy. For purposes of
the Name Policy, the Funds will value eligible derivatives at fair value or
market value and not notional value.
Each
Fund’s principal investment strategies are discussed in the “Fund Summaries”
section. These are the strategies that each Fund’s investment adviser and
sub-adviser believe are most likely to be important in trying to achieve the
Fund’s investment objective. This section provides more information about these
strategies, as well as information about some additional strategies that the
Funds’ sub-adviser uses, or may use, to achieve each Fund’s objective. You
should be aware that each Fund may also use strategies and invest in securities
that are not described in this prospectus, but that are described in the
statement of additional information. For a copy of the statement of
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|
14 |
Section
2
Additional Detail About the Funds' Strategies, Holdings and
Risks |
additional
information, call Nuveen Investor Services at (888) 290-9881 or visit the Funds’
website at www.nuveen.com/etf.
ESG
Indexes
Each
Fund seeks to track the investment results of its Index, which is comprised of
securities that meet certain ESG criteria. Companies with significant
involvement in certain controversial business activities, including alcohol
production, tobacco production, nuclear power, gambling, and weapons and
firearms production, are ineligible to be included in the Index. For purposes of
this policy, as of the date of this prospectus, all companies that earn either
10% or more of their revenue or more than $1 billion in revenue ($3 billion in
revenue for all conventional weapons manufacturers; 6000 MW of installed
capacity or 10% or more of installed capacity attributed to nuclear sources for
nuclear power generation) from the production of alcohol-, tobacco- and/or
gambling-related products, gambling operations, and/or manufacturing
conventional weapons, conventional weapon components or weapons systems are
excluded from the Index. In addition, all civilian firearm companies classified
as “producers” that earn more than 0% of revenue from civilian firearms are
excluded from the Index. These percentage and dollar amount thresholds are
subject to change in accordance with updates to the rules-based Index
methodology. All companies with any tie to controversial weapons, such as
cluster munitions, landmines, depleted uranium weapons, nuclear weapons, and
biological/chemical weapons, blinding lasers, non-detectable fragments and
incendiary weapons are also excluded. All companies involved in nuclear power
generation, including nuclear fuel enrichment, uranium mining, and/or nuclear
reactor design or construction, are also excluded from the Index. In addition,
companies that surpass certain thresholds of installed capacity attributed to
nuclear sources are also excluded. Securities with any ownership of fossil fuel
reserves are ineligible for inclusion in the Index. Securities eligible for
inclusion in the Index are then screened to remove those companies with the
highest absolute emissions and the highest carbon emission intensity, relative
to the other eligible securities, in accordance with the Index methodology and
greenhouse gas emissions data provided by MSCI ESG Research,
Inc.
Under
normal market conditions, each Fund invests at least 80% of its assets,
exclusive of collateral held from securities lending, in component securities of
its Index. Each Fund may also, as a non-principal strategy, invest up to 20% of
its assets in securities and other instruments that the Fund’s sub-adviser
believes will help it track its Index, such as shares of other investment
companies (including other ETFs), derivative instruments (including forward
contracts, futures contracts, options on futures contracts, options and swaps),
and cash and cash equivalents. Additional information about each Fund’s
portfolio holdings can be found below.
Equity
Securities
The
Funds invest in equity securities. Equity securities generally include common
stocks; preferred securities; warrants to purchase common stocks and preferred
securities; convertible debt securities that are either in the money or
immediately convertible into common stocks or preferred securities; common and
preferred securities issued by master limited partnerships and real estate
investment trusts (“REITs”);
depositary receipts; and other securities with equity
characteristics.
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|
Section
2
Additional Detail About the Funds' Strategies, Holdings and
Risks |
15 |
REITs
As
a non-principal investment strategy, each Fund may invest in REITs. REITs are
publicly traded corporations or trusts that invest in residential or commercial
real estate. REITs generally can be divided into the following three
types:
· Equity
REITs, which invest the majority of their assets directly in real property and
derive their income primarily from rents and capital gains or real estate
appreciation.
· Mortgage
REITs, which invest the majority of their assets in real estate mortgage loans
and derive their income primarily from interest payments.
· Hybrid
REITs, which combine the characteristics of equity REITs and mortgage REITs.
The
only REITs included in the Index are equity REITs. The Funds can invest in
common stock, preferred securities and convertible securities issued by equity
REITs.
Derivatives
As
a non-principal investment strategy, each Fund may invest in derivatives.
Generally, a derivative is a financial contract the value of which depends upon,
or is derived from, the value of an underlying asset, reference rate or index.
Derivatives generally take the form of contracts under which the parties agree
to payments between them based upon the performance of a wide variety of
underlying references, such as stocks, bonds, loans, commodities, interest
rates, currency exchange rates, and various domestic and foreign indices.
Examples of derivative instruments include forward currency contracts, currency
and interest rate swaps, currency options, futures contracts, options on futures
contracts and swap agreements.
Derivatives
may entail investment exposures that are greater than their cost would suggest.
As a result, a small investment in derivatives could have a large impact on a
Fund’s performance.
Investment
Companies and Other Pooled Investment Vehicles
As
a non-principal investment strategy, each Fund may invest in securities of other
open-end or closed-end investment companies, including ETFs. As a
shareholder in an investment company or other pooled investment vehicle, each
Fund will bear its ratable share of that vehicle’s expenses, and would remain
subject to payment of the Fund’s management fees with respect to assets so
invested. Shareholders would therefore be subject to duplicative expenses to the
extent a Fund invests in an investment company or other pooled investment
vehicle. In addition, each Fund will incur brokerage costs when purchasing and
selling shares of ETFs. Securities of investment companies or other pooled
investment vehicles may be leveraged, in which case the value and/or yield of
such securities will tend to be more volatile than securities of unleveraged
vehicles.
Generally,
investments in other investment companies (including ETFs) are subject to
statutory limitations prescribed by the Investment Company Act of 1940, as
amended ("1940
Act").
These limitations include a prohibition on a Fund acquiring more than 3% of the
voting shares of any other investment company, and a prohibition on investing
more than 5% of the Fund’s total assets in the securities of any one investment
company or more than 10% of its total assets, in the aggregate, in investment
company securities. Subject to certain conditions, a Fund also may invest in
money market funds beyond the statutory limits described above.
Cash
Equivalents and Short-Term Investments
As
a non-principal investment strategy, each Fund may invest in cash and in U.S.
dollar-denominated high-quality money market instruments and other short-term
securities,
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|
16 |
Section
2
Additional Detail About the Funds' Strategies, Holdings and
Risks |
including
money market funds, in such proportions as warranted by prevailing market
conditions and the Funds’ principal investment strategies. The Funds may
temporarily invest without limit in such holdings for liquidity purposes. Being
invested in these securities may keep a Fund from participating in a market
upswing and prevent a Fund from achieving its investment objective.
Temporary
Defensive Positions
In
certain situations or market conditions, such as in the case of liquidity
concerns and/or unusually large cash inflows or redemptions, a Fund may
temporarily depart from its normal investment policies and strategies, provided
that the alternative is consistent with the Fund’s investment objective and is
in the best interest of the Fund’s shareholders.
|
Disclosure
of Portfolio Holdings |
A
description of each Fund’s policies and procedures with respect to the
disclosure of the Fund’s portfolio holdings is available in the Funds’ statement
of additional information. In addition, the identities and quantities of the
securities held by each Fund are disclosed on the Funds’
website.
Risk
is inherent in all investing. Investing in the Funds involves risk, including
the risk that you may receive little or no return on your investment or even
that you may lose part or all of your investment. Therefore, before investing
you should consider carefully the principal risks and certain other risks that
you assume when you invest in the Funds. Descriptions of these risks listed
below are presented alphabetically to facilitate your ability to find particular
risks and compare them with the risks of other funds. Each risk summarized below
is considered a “principal risk” of investing in the Funds, regardless of the
order in which it appears. Because of these risks, you should consider an
investment in a Fund to be a long-term investment.
Principal
Risks
Concentration
risk:
To the extent that a Fund’s portfolio is concentrated in the securities of
issuers in a particular market, industry, group of industries, sector or asset
class, the Fund may be adversely affected by the performance of those
securities, may be subject to increased price volatility and may be more
susceptible to adverse economic, market, political or regulatory occurrences
affecting that market, industry, group of industries, sector or asset class.
Concentrated exposure to an industry or group of industries may cause a Fund to
experience increased market price volatility compared to funds that invest more
broadly in the overall market.
Currency
risk:
Changes in currency exchange rates will affect the value of non-U.S. securities,
the value of dividends and interest earned from such securities, gains and
losses realized on the sale of such securities, and hence will affect the net
asset value of a Fund. A strong U.S. dollar relative to these foreign currencies
will adversely affect the value of a Fund.
Cybersecurity
risk:
Intentional cybersecurity breaches include: unauthorized access to systems,
networks or devices (such as through “hacking” activity); infection from
computer viruses or other malicious software code; and attacks that shut down,
disable, slow, or otherwise disrupt operations, business processes, or website
access or functionality. In addition, unintentional incidents can occur, such as
the inadvertent release of confidential information (possibly resulting in the
violation of applicable privacy laws).
|
|
Section
2
Additional Detail About the Funds' Strategies, Holdings and
Risks |
17 |
A
cybersecurity breach could result in the loss or theft of customer data or
funds, the inability to access electronic systems (“denial of services”), loss
or theft of proprietary information or corporate data, physical damage to a
computer or network system, or costs associated with system repairs. Such
incidents could cause a Fund, a Fund’s investment adviser or sub-adviser, a
financial intermediary, or other service providers to incur regulatory
penalties, reputational damage, additional compliance costs or financial loss.
Negative impacts on a Fund could include the inability to calculate NAV,
transact business, process transactions on behalf of shareholders or safeguard
data. In addition, such incidents could affect issuers in which a Fund invests,
and thereby cause a Fund’s investments to lose value.
Emerging
markets risk (Nuveen ESG Emerging Markets Equity ETF ("NUEM") only):
The
risk of foreign investment often increases in countries with emerging markets or
that are otherwise economically tied to emerging market countries. Emerging
markets generally do not have the level of market efficiency and strict
standards in accounting, auditing, financial reporting, recordkeeping and
securities regulation to be on par with advanced economies. Obtaining
disclosures comparable to frequency, availability and quality of disclosures
required by securities in the U.S. may be difficult. As a result, there could be
less information about issuers in emerging market countries, which could
negatively affect the ability of the Fund to evaluate local companies or their
potential impact on the Fund’s performance. Investments in emerging markets come
with much greater risk due to political instability, domestic infrastructure
problems and currency volatility. Because their financial markets may be very
small, prices of financial instruments in emerging market countries may be
volatile and difficult to determine. In addition, foreign investors such as the
Fund are subject to a variety of special restrictions in many emerging market
countries. Shareholder claims that are available in the U.S. (including
derivative litigation), as well as regulatory oversight, authority and
enforcement actions that are common in the U.S. by regulators, may be difficult
or impossible for shareholders of securities in emerging market countries or for
U.S. authorities to pursue.
Equity
security risk:
Equity securities in the Fund’s portfolio may decline significantly in price
over short or extended periods of time. Even a long-term investment approach
cannot guarantee a profit. Price changes may occur in the market as a whole, or
they may occur in only a particular country, company, industry, or sector of the
market. From
time to time, the Fund may invest a significant portion of its assets in
companies in one or more related sectors or industries which would make the Fund
more vulnerable to adverse developments affecting such sectors or industries.
Adverse events in any part of the U.S. and global financial markets may have
unexpected negative effects on equity markets. These events may at times result
in unusually high market volatility, including short-term volatility, which
could negatively affect Fund performance.
A
variety of factors can negatively affect the price of a particular company's
equity securities. These factors may include, but are not limited to: poor
earnings reports, a loss of customers, litigation against the company, general
unfavorable performance of the company's sector or industry, or changes in
government regulations affecting the company or its industry.
ESG
strategy risk:
Because a Fund’s ESG investment strategy will exclude securities of certain
issuers for non-financial reasons based on the ESG criteria of an Index
(i.e.,
companies that do not demonstrate relative strength in ESG characteristics or
are involved in certain prohibited activities), a Fund may forgo some market
opportunities available to funds that do not use an ESG investment strategy or
may be required to sell a security when it might otherwise be disadvantageous to
do so. This may cause a Fund to underperform the stock market as a whole or
other funds that do not use an ESG
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investment
strategy. In addition, there is a risk that the companies identified by a Fund’s
ESG investment strategy do not operate as expected when addressing ESG issues. A
company’s ESG performance or practices or the Index’s or the sub-adviser’s
assessment of those actions could vary over time, which could cause an Index to
allocate to, and a Fund to be temporarily invested in companies that do not
comply with an Index’s ESG criteria or a Fund’s approach towards considering ESG
characteristics. There are significant differences in interpretations of what it
means for a company to have positive ESG characteristics. As a result, the
factors and criteria considered when generating ESG data and the results of such
ESG research generally differ across ESG data providers. The evaluation of ESG
factors is often subjective and the third-party ESG data provider used by the
Index may not identify or evaluate every relevant ESG factor with respect to
every Index constituent. While the sub-adviser believes the ESG criteria used by
each Fund’s Index are reasonable, the portfolio decisions made by the Fund based
on an Index’s ESG criteria may differ from the decisions of other investors or
advisers based on their views and evaluations of ESG characteristics. As a
result, a Fund may invest in securities that do not reflect the beliefs of any
particular investor. In making investment decisions, the Index, and, in turn,
the sub-adviser, relies on information and data that could be incomplete or
erroneous, which could cause the Index and sub-adviser to incorrectly assess a
company’s ESG characteristics. The third-party data provider may differ in the
data it provides for a given security or between industries, or may only take
into account one of many ESG-related components of a company. Furthermore,
because ESG considerations are still an emerging area of investment focus, data
availability and reporting with respect to ESG criteria may not always be
available or may become unreliable.
The
successful implementation of the ESG component of each Fund’s Index methodology
is therefore dependent in large part on the ESG factors considered and research
methodologies employed by the Index's third-party ESG data provider, as well as
the timely availability of accurate information.
Regulatory
changes or interpretations regarding the definitions and/or use of ESG
characteristics could have a material adverse effect on a Fund’s ability to
invest in accordance with its investment policies and/or achieve its investment
objective, as well as the ability of certain classes of investors to invest in
funds, such as the Funds, whose strategies include ESG factors.
Financial
services sector risk:
The Funds currently invest a significant portion of their assets in the
financial services sector, although this may change over time. Securities
of companies in the financial services sector can be significantly affected by
changes in, among other things, interest rates, currency exchange rates,
government regulation, the rate of defaults on corporate, consumer and
government debt, the availability and cost of capital, portfolio concentrations
in geographic markets, industries or products (such as commercial and
residential real estate loans) and competition from new
entrants.
Foreign
investment risk:
Non-U.S. issuers or U.S. issuers with significant non-U.S. operations may be
subject to risks in addition to or different than those of issuers that are
located in or principally operated in the United States due to political, social
and economic developments abroad, different regulatory environments and laws,
potential seizure by the government of company assets, higher taxation,
withholding taxes on dividends and interest and limitations on the use or
transfer of portfolio assets. If any of these events were to occur, the affected
security may experience drastic declines. In the event of a seizure of assets by
a non-U.S. government, a Fund could lose its entire investment in that
particular country.
To
the extent a Fund invests in depositary receipts, the Fund will be subject to
many of the same risks as when investing directly in non-U.S. securities. The
holder of an
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unsponsored
depositary receipt may have limited voting rights and may not receive as much
information about the issuer of the underlying securities as would the holder of
a sponsored depositary receipt.
Other
non-U.S. investment risks include the following:
· Enforcing
legal rights may be difficult, costly and slow in non-U.S. countries, and there
may be special problems enforcing claims against non-U.S.
governments.
· Non-U.S.
companies may not be subject to accounting, auditing, financial reporting or
recordkeeping standards or governmental supervision comparable to U.S.
companies, and there may be less public information about their
operations.
· Non-U.S.
markets may be less liquid and more volatile and may be more difficult to value
than U.S. markets.
· The
U.S. and non-U.S. markets often rise and fall at different times or by different
amounts due to economic or other developments, including armed conflict or
political, social or diplomatic events, particular to a given country or region.
This phenomenon would tend to lower the overall price volatility of a portfolio
that included both U.S. and non-U.S. securities. Sometimes, however, global
trends will cause the U.S. and non-U.S. markets to move in the same direction,
reducing or eliminating the risk reduction benefit of international
investing.
· Non-U.S.
securities traded on foreign exchanges, particularly in emerging markets
countries, may be subject to further risks due to the inexperience of local
investment professionals and financial institutions, the possibility of
permanent or temporary termination of trading, and greater spreads between bid
and asked prices for securities. In addition, non-U.S. exchanges and investment
professionals are subject to less governmental regulation, and commissions may
be higher than in the United States. Also, there may be delays in the settlement
of non-U.S. exchange transactions.
· A
Fund’s income from non-U.S. issuers may be subject to non-U.S. withholding
taxes. In some countries, a Fund also may be subject to taxes on trading profits
and, on certain securities transactions, transfer or stamp duties tax. To the
extent non-U.S. income taxes are paid by a Fund, U.S. shareholders may be
entitled to a credit or deduction for U.S. tax purposes.
Some
countries restrict to varying degrees foreign investment in their securities
markets. In some circumstances, these restrictions may limit or preclude
investment in certain countries or may increase the cost of investing in
securities of particular companies. Non-U.S. countries may be subject to
economic sanctions or other measures by the United States or other governments.
The type and severity of sanctions and other similar measures, including counter
sanctions and other retaliatory actions, that may be imposed could vary broadly
in scope, and their impact is impossible to predict. The imposition of sanctions
could, among other things, cause a decline in the value and/or liquidity of
securities issued by the sanctioned country or companies located in or
economically tied to the sanctioned country and increase market volatility and
disruption in the sanctioned country and throughout the world.
Sanctions
and other similar measures could limit or prevent a Fund from buying and selling
securities (in the sanctioned country and other markets), significantly delay or
prevent the settlement of securities transactions, and significantly impact a
Fund’s liquidity and performance.
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To
the extent a Fund invests a significant portion of its assets in the securities
of companies in a single country or region (or depositary receipts representing
such securities), it is more likely to be impacted by events or conditions
affecting that country or region. Investment in a Fund may be more exposed to a
single country or a region’s economic cycles, stock market valuations and
currency, which could increase its risk compared with a more geographically
diversified fund. In addition, political, social, regulatory, economic or
environmental events that occur in a single country or region may adversely
affect the values of that country or region’s securities and thus the holdings
of the Fund.
Geographic
concentration risk:
To the extent a Fund invests a significant portion of its assets in the
securities of companies in a single country or region (or depositary receipts
representing such securities), it is more likely to be impacted by events or
conditions affecting that country or region. Investment in a Fund may be more
exposed to a single country or a region’s economic cycles, stock market
valuations and currency, which could increase its risk compared with a more
geographically diversified fund. In addition, political, social, regulatory,
economic or environmental events that occur in a single country or region may
adversely affect the values of that country or region’s securities and thus the
holdings of the Fund.
Index
provider risk:
There is no assurance that an Index will be determined, maintained, constructed,
reconstituted, rebalanced, composed, calculated or disseminated accurately. To
correct any such error, an index provider may carry out an unscheduled rebalance
or other modification of an Index constituents or weightings, which may increase
a Fund’s costs. Unusual market conditions may cause an index provider to
postpone a scheduled rebalance. Such a postponement in a time of market
volatility could mean a constituent that would otherwise be removed at rebalance
may remain, causing the performance and constituents of the index to vary from
those expected under normal conditions. Index providers generally do not provide
any representation or warranty in relation to the quality, accuracy or
completeness of data in the indexes in which they license, and generally do not
guarantee that an index will be calculated in accordance with its stated
methodology. Losses or costs associated with any index provider errors generally
will be borne by the Fund and its shareholders.
Industrials
sector risk (Nuveen ESG International Developed Markets Equity ETF ("NUDM")
only): The
Fund currently invests a significant portion of its assets in the industrials
sector, although this may change over time. The value of securities issued by
industrials companies may be adversely affected by supply and demand related to
their specific products or services and industrials sector products in general.
The products of manufacturing companies may face obsolescence due to rapid
technological developments and frequent new product introduction. World events
and changes in government regulations, import controls, economic conditions and
exchange rates may adversely affect the performance of companies in the
industrials sector. Industrials companies may be adversely affected by liability
for environmental damage and product liability claims. Industrials companies may
also be adversely affected by changes or trends in commodity prices, which may
be influenced by unpredictable factors. Other factors that may impact
industrials companies include intense competition, consolidation, spending
trends, economic cycles, delays in modernization, labor relations, and
e-commerce initiatives.
Information
technology sector risk (NUEM only):
The Fund currently invests a significant portion of its assets in the
information technology sector, although this may change over time. Securities of
companies in the information technology sector can be significantly affected by
changes in, among other things, the supply and demand for specific products
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and
services, the pace of technological development and product obsolescence, market
competition, government regulation, and patent and intellectual property
rights.
Investment
style risk: Each
Fund invests in the securities included in, or representative of, its Index
regardless of their investment merit. Each Fund does not attempt to outperform
its Index or take defensive positions in declining markets or in response to
changing market conditions. As a result, a Fund’s performance may be adversely
affected by a general decline in the market segments relating to its Index. In
addition, because the Index selects securities for inclusion based on ESG
criteria, a Fund may forgo some market opportunities available to funds that do
not use these criteria.
Market
trading risks:
As with all ETFs, a Fund’s shares may be bought and sold in the secondary market
at market prices. Although it is expected that the market price of a Fund’s
share typically will approximate its NAV, there may be times when the market
price and the NAV diverge more significantly, particularly in times of market
volatility or steep market declines. Thus, you may pay more or less than NAV
when you buy a Fund’s shares on the secondary market, and you may receive more
or less than NAV when you sell those shares. In times of market stress, a Fund’s
underlying portfolio holdings may become less liquid, which in turn may affect
the liquidity of the Fund’s shares and/or lead to more significant differences
between a Fund’s market price and its NAV. In addition, the Funds’ underlying
portfolio holdings trade on foreign exchanges that may be closed when the
national securities exchange on which the Fund’s shares trade is open (and vice
versa), which may result in larger differences between the Fund’s NAV and its
market price than those experienced by ETFs that invest in domestic
securities.
Only
certain institutional investors are eligible to purchase and redeem shares
directly from a Fund at NAV. In addition, efficient trading in a Fund’s shares
on the secondary market depends on the participation of firms acting as market
makers and/or liquidity providers in the market place. To the extent these
market maker and authorized participant firms exit the ETF business or otherwise
significantly reduce their business activities and no other entities step
forward to perform these functions, a Fund’s shares may trade at a material
discount to NAV.
During
periods of high market volatility, a Fund’s share may trade at a significant
discount to its NAV, and in these circumstances certain types of brokerage
orders may expose an investor to an increased risk of loss. A “stop order,”
sometimes called a “stop-loss order,” may cause a Fund’s share to be sold at the
next prevailing market price once the “stop” level is reached, which during a
period of high volatility can be at a price that is substantially below NAV. By
including a “limit” criteria with your brokerage order, you may be able to limit
the size of the loss resulting from the execution of an ill-timed stop
order.
Although
each Fund’s shares are listed for trading on a national securities exchange, it
is possible that an active trading market may not develop or be maintained, in
which case transactions may occur at wider bid/ask spreads (discussed in further
detail below). Trading of a Fund’s shares may be halted by the activation of
individual or market-wide trading halts (which halt trading for a specific
period of time when the price of a particular security or overall market prices
decline by a specified percentage).
Buying
or selling a Fund’s shares on an exchange involves two types of costs that apply
to all securities transactions. When buying or selling shares of a Fund through
a broker, you will likely incur a brokerage commission and other charges. In
addition, you may incur the cost of the “spread;” that is, the difference
between what investors are willing to pay for a Fund’s shares (the “bid” price)
and the price at which they are willing to sell a
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Fund’s
shares (the “ask” price). The spread, which varies over time based on trading
volume and market liquidity, is generally narrower if a Fund has more trading
volume and market liquidity and wider if a Fund has less trading volume and
market liquidity (which is often the case for funds that are newly launched or
small in size). A Fund’s spread may also be impacted by market volatility
generally and the liquidity of the underlying securities held by the Fund,
particularly for newly launched or smaller funds. Because of the costs inherent
in buying or selling a Fund’s shares, frequent trading may detract significantly
from investment results, and an investment in a Fund’s shares may not be
advisable for investors who anticipate regularly making small investments
through a brokerage account.
Mid-cap
company risk:
While securities of mid-cap companies may be slightly less volatile than those
of small-cap companies, they still involve substantial risk. Mid-cap companies
may have limited product lines, markets or financial resources, and they may be
dependent on a limited management group. Securities of mid-cap companies may be
subject to more abrupt or erratic market movements than those of larger, more
established companies or broader market averages in general.
Risks
of investing in Asia (NUEM only):
The Fund currently invests a significant portion of its assets in companies
located in Asia, although this may change over time. Asia includes both
developed and developing economies experiencing different stages of growth and
prosperity. Although some Asian economies have experienced rapid rates of
economic growth and industrialization recently, there is no guarantee these
trends will continue. Further, certain Asian economies may experience currency
devaluations and restrictions, high inflation, decreased exports, over-extension
of credit, high unemployment rates, government corruption, and economic
recessions. Investments in these countries may also be subject to heightened
risk of expropriation, confiscatory taxation, piracy of intellectual property
data, and political instability, including armed conflict and social unrest. In
particular, any outbreak in hostilities between North and South Korea or any
increased violence or terrorism in Indonesia or the Philippines could have a
significant impact on the entire region and, potentially, the global economy.
International trade and the commodities market are also very important to the
economies of many Asian countries. Certain Asian countries are vulnerable to a
decrease in the price of or global demand for certain commodities, such as oil,
natural gas, and coal. The economic conditions of trading partners and
neighboring nations as well as the inflow of international capital may also
significantly impact these Asian countries’ economies. Certain governments in
the region may also exert their influence over many aspects of the private
sector in their respective countries and may own or control companies that
compete against private enterprises.
Risks
of investing in China (NUEM only):
The Fund currently invests a significant portion of its assets in companies
located in China, although this may change over time. Although the Chinese
economy has grown rapidly during recent years and the Chinese government has
implemented significant economic reforms to liberalize trade policy, promote
foreign investment, and reduce government control of the economy, there can be
no guarantee that economic growth or these reforms will continue. In particular,
the Chinese economy may experience slower growth if global or domestic demand
for Chinese goods decreases significantly. The Chinese economy is also
susceptible to rising rates of inflation, economic recession, market
inefficiency, volatility, and pricing anomalies that may be connected to
governmental influence, a lack of publicly-available information and/or
political and social instability. The government of China maintains strict
currency controls on the yuan and Hong Kong dollar so that these currencies have
historically traded in a tight range relative to the U.S. dollar. Given its
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past
intervention in the currency market, the Chinese government has been under
pressure to manage its currency in a less restrictive fashion so that it is less
correlated to the U.S. dollar. This could result in an increase in the value of
the yuan and the Hong Kong dollar relative to the U.S. dollar, which could have
a negative impact on Chinese exports and the overall Chinese economy. Trade
tariffs or an economic downturn in any of the economies of China’s key trading
partners could also have a detrimental impact on the Chinese economy.
Investments
in companies based or operated in China through legal structures known as
variable interest entities (“VIEs”),
which are not formally recognized under Chinese law, are subject to the risk,
among others, that China could cease to allow VIEs at any time or impose new
restrictions on the structure. It is also possible that the contractual
arrangements underlying VIEs could be deemed unenforceable in China, which could
limit (or eliminate) the remedies and rights available to the VIE and its
investors and result in significant economic losses. Foreign
investors are also subject to the risk of loss from expropriation or
nationalization of their investment assets and property, governmental
restrictions on foreign investments and the repatriation of capital invested.
Adding to this risk, China’s authoritarian government has used force in the past
to suppress civil dissent, and China’s foreign and domestic policies remain in
conflict with those of Hong Kong as well as nationalist and religious groups in
Xinjiang and Tibet. China’s growing income inequality and worsening
environmental conditions also are factors that may affect the Chinese
economy.
From
time to time and as recently as January 2020, China has experienced outbreaks of
infectious illnesses, and the country may be subject to other infectious
illnesses, diseases or other public health emergencies in the future.
Any
public health emergency could reduce consumer demand or economic output, result
in market closures, travel restrictions or quarantines, and generally have a
significant impact on the Chinese economy, which in turn could adversely affect
the Fund’s investments.
Risks
of investing in Europe (NUDM only):
The Fund currently invests a significant portion of its assets in companies
located in Europe, including the United Kingdom, although this may change over
time. The economies and markets of developed countries in Western Europe are
interconnected. Events with a substantial impact on one European country
typically impact its neighboring countries as well. For example, the extent and
duration of Russia’s large-scale military invasion of Ukraine, initiated in
February 2022, and the broad-ranging economic sanctions levied against Russia by
the United States, the European Union, the United Kingdom, and other countries,
remain unknown, but these events could have a significant adverse impact on
Europe’s overall economy.
Most
developed nations in Europe belong to the European Union (“EU”),
and many of these nations also belong to the European Monetary Union
(“EMU”)
through which countries share a common currency, the euro, but are also subject
to economic and monetary controls, such as restrictions on inflation rates,
deficits, and debt levels. Unemployment remains high in many European countries,
and several European countries continue to deal with significant debt problems.
The default or threat of default of an EMU country on its sovereign debt may
have a significant adverse effect on the economies of other European nations as
well as the value of the euro. Changes in the supply and demand for imports and
exports, EU and governmental regulations on trade, and currency exchange rates
in Europe (e.g.,
between the euro and the British pound) may all have a substantial impact on
European financial markets and the economies of European countries.
Effective
January 1, 2021, the United Kingdom left the EU single market and customs union
(“Brexit”)
under the terms of a new trade agreement; however, there remains
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considerable
uncertainty about the potential trade, economic and market consequences of
Brexit. The negative impact of the United Kingdom’s departure from the EU, as
well as any future departures by other countries, could be significant, not only
to the British and European economies, but also to the broader global economy.
Such departures could potentially result in increased market volatility and
illiquidity, and lower economic growth for companies that rely significantly on
Europe for their business activities and revenues, which could negatively impact
the value of the Fund’s investments.
Risks
of investing in India (NUEM only): The
Fund currently invests a significant portion of its assets in companies located
in India, although this may change over time. Investments in Indian issuers may
exhibit significantly greater market volatility than investments in issuers from
more developed markets due to India’s unique legal, regulatory, political,
currency and economic risks. Such investments are subject to political and legal
uncertainty, greater government control over the economy, currency fluctuations
or blockage, and the risk of nationalization or expropriation of assets. These
risks, among others, may result in higher potential losses for the Fund as well
as higher transaction costs. The limited liquidity of the Indian securities
markets, which is characterized by a small number of listed companies that have
significantly smaller market capitalizations, may also affect the Fund’s ability
to acquire or dispose of Indian securities at the price and time that the Fund
desires. These factors, coupled with the lack of extensive accounting, auditing
and financial reporting standards and practices, as compared to the United
States, may increase the Fund’s risk of loss with respect to its investments in
India. In addition, foreign investors may face restrictions on their investment
opportunities in India, including limits on foreign ownership imposed by the
Reserve Bank of India. Moreover, in the recent past, India has experienced civil
unrest, religious conflicts, border disputes and hostilities with neighboring
countries, including Pakistan, and terrorist threats from separatist movements
in several Indian states. Incidents involving India’s or the region’s security
may cause uncertainty in the Indian market and may adversely affect the Indian
economy and the Fund’s investments.
Risks
of investing in Japan (NUDM only):
The Fund currently invests a significant portion of its assets in companies
located in Japan, although this may change over time. Although Japan has
recently emerged from a prolonged economic downturn that began in 2000, Japan’s
economic growth rate may continue to lag the growth rates of neighboring Asian
economies and other developed countries’ economies. Japan’s economy remains
heavily dependent on international trade, and thus Japan’s economy may be
adversely affected by trade tariffs, other protectionist measures, competition
from developing nations, and political tensions with or downturns in the
economies of its primary trading partners, including the United States, China,
and other Southeast Asian countries. In addition, Japan relies on oil imports,
and higher commodity prices could have a negative impact on the Japanese
economy. In the past, the Japanese economy has been negatively affected by,
among other factors, government intervention and protectionism, large government
debt, relatively high unemployment rates, an aging population and workforce, and
an unstable financial services sector. Japan is also vulnerable to natural
disasters, such as earthquakes, typhoons, volcanic eruptions, and tsunamis, any
one of which could significantly impact its economy and
infrastructure.
Service
provider operational risk:
A Fund’s service providers, such as a Fund’s administrator, custodian or
transfer agent, may experience disruptions or operating errors that could
negatively impact a Fund. Although service providers are required to have
appropriate operational risk management policies and procedures, and to take
appropriate precautions to avoid and mitigate risks that could lead to
disruptions and operating errors, it may not be possible to identify all of the
operational risks that may affect a Fund or to develop processes and controls to
completely eliminate or mitigate their occurrence or effects.
Tracking
error risk:
Tracking error is the divergence of a Fund’s performance from that of its Index.
Tracking error may occur because of, for example, pricing differences,
transaction costs, a Fund’s holding of uninvested cash, differences in timing of
the accrual of distributions, changes to its Index or the need to meet various
new or existing regulatory requirements. This risk may be heightened during
times of increased market volatility or other unusual market conditions.
Tracking error also may result because a Fund incurs fees and expenses, but its
Index does not.
Non-Principal
Risks
Derivatives
risk:
The use of derivatives presents risks different from, and possibly greater than,
the risks associated with investing directly in traditional securities,
including leverage risk, market risk, counterparty risk, liquidity risk,
operational risk and legal risk. Operational risk generally refers to risk
related to potential operational issues, including documentation issues,
settlement issues, systems failures, inadequate controls and human error, and
legal risk generally refers to insufficient documentation, insufficient capacity
or authority of counterparty, or legality or enforceability of a contract.
Derivatives
can be highly volatile, illiquid and difficult to value, and there is the risk
that changes in the value of a derivative held by a Fund will not correlate with
the asset,
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index
or rate underlying the derivative contract. Changes in the value of a derivative
may also create margin delivery or settlement obligations for a
Fund.
The
use of derivatives can lead to losses because of adverse movements in the price
or value of the underlying asset, index or rate, which may be magnified by
certain features of the contract. A derivative transaction also involves the
risk that a loss may be sustained as a result of the failure of the counterparty
to the contract to make required payments. These risks are heightened when the
management team uses derivatives to enhance a Fund’s return or as a substitute
for a position or security, rather than solely to hedge (or offset) the risk of
a position or security held by a Fund.
A
Fund may use derivatives to hedge risk. Hedges are sometimes subject to
imperfect matching between the derivative and the underlying security, and there
can be no assurance that the Fund’s hedging transactions will be effective. The
use of hedging may result in certain adverse tax consequences.
In
addition, when a Fund engages in certain derivative transactions, it is
effectively leveraging its investments, which could result in exaggerated
changes in the NAV of the Fund’s shares and can result in losses that exceed the
amount originally invested. The success of a Fund’s derivatives strategies will
depend on the sub-adviser’s ability to assess and predict the impact of market
or economic developments on the underlying asset, index or rate and the
derivative itself, without the benefit of observing the performance of the
derivative under all possible market conditions.
Each
Fund may also enter into over-the-counter (“OTC”)
transactions in derivatives. Transactions in the OTC markets generally are
conducted on a principal-to-principal basis. The terms and conditions of these
instruments generally are not standardized and tend to be more specialized or
complex, and the instruments may be harder to value. In general, there is less
governmental regulation and supervision of transactions in the OTC markets than
of transactions entered into on organized exchanges. In addition, certain
derivative instruments and markets may not be liquid, which means a Fund may not
be able to close out a derivatives transaction in a cost-efficient manner.
Short
positions in derivatives may involve greater risks than long positions, as the
risk of loss on short positions is theoretically unlimited (unlike a long
position, in which the risk of loss may be limited to the notional amount of the
instrument).
Swap
agreements may involve fees, commissions or other costs that may reduce a Fund’s
gains from a swap agreement or may cause the Fund to lose money.
Futures
contracts are subject to the risk that an exchange may impose price fluctuation
limits, which may make it difficult or impossible for a Fund to close out a
position when desired.
Options
contracts may expire unexercised, which may cause a fund to realize a capital
loss equal to the premium paid on a purchased option or a capital gain equal to
the premium received on a written option.
Global
economic risk:
National and regional economies and financial markets are becoming increasingly
interconnected, which increases the possibilities that conditions in one
country, region or market might adversely impact issuers in a different country,
region or market. Changes in legal, political, regulatory, tax and economic
conditions may cause fluctuations in markets and securities prices around the
world, which could negatively impact the value of a Fund’s investments. For
example, the United Kingdom’s referendum decision to leave the European Union
resulted in the depreciation in value of the British pound, short term declines
in the stock markets and ongoing economic and political uncertainty concerning
the consequences of the exit. Similar major economic or
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Risks |
political
disruptions, particularly in large economies like China’s, may have global
negative economic and market repercussions. Additionally, events such as war,
terrorism, natural and environmental disasters and the spread of infectious
illnesses or other public health emergencies may adversely affect the global
economy and the markets and issuers in which a Fund invests. Recent examples of
such events include the outbreak of a novel coronavirus known as COVID-19 that
was first detected in China in December 2019, Russia’s invasion of Ukraine,
and heightened concerns regarding North Korea’s nuclear weapons and long-range
ballistic missile programs. These events could reduce consumer demand or
economic output, result in market closure, travel restrictions or quarantines,
and generally have a significant impact on the global economy. These events
could also impair the information technology and other operational systems upon
which a Fund’s service providers, including the investment adviser and
sub-adviser, rely, and could otherwise disrupt the ability of employees of a
Fund’s service providers to perform essential tasks on behalf of a Fund.
Governmental and quasi-governmental authorities and regulators throughout the
world have in the past responded to major economic disruptions with a variety of
significant fiscal and monetary policy changes, including but not limited to,
direct capital infusions into companies, new monetary programs and dramatically
lower interest rates. An unexpected or quick reversal of these policies, or the
ineffectiveness of these policies, could increase volatility in securities
markets, which could adversely affect a Fund’s investments.
Other
investment companies risk:
When a Fund invests in other investment companies, such as ETFs, shareholders
bear both their proportionate share of Fund expenses and, indirectly, the
expenses of the other investment companies. Furthermore, a Fund is exposed to
the risks to which the other investment companies may be subject. For Funds that
invest in index-based ETFs, while such ETFs seek to achieve the same returns as
a particular market index, the performance of an ETF may diverge from the
performance of such index (commonly known as tracking error).
|
|
Section
2
Additional Detail About the Funds' Strategies, Holdings and
Risks |
27 |
Section
3
Fund Management
Nuveen
Fund Advisors, LLC (the “Adviser”),
each Fund’s investment adviser, offers advisory and investment management
services to a broad range of clients, including investment companies and other
pooled investment vehicles. The Adviser has overall responsibility for
management of the Funds, oversees the management of each Fund’s portfolio,
manages each Fund’s business affairs and provides certain clerical, bookkeeping
and other administrative services. In addition, the Adviser arranges for
sub-advisory, transfer agency, custody, fund administration and all other
non-distribution related services necessary for each Fund to operate. The
Adviser is a wholly owned subsidiary of Nuveen, LLC (“Nuveen”),
the investment management arm of Teachers Insurance and Annuity Association of
America (“TIAA”).
TIAA is a life insurance company founded in 1918 by the Carnegie Foundation for
the Advancement of Teaching and is the companion organization of College
Retirement Equities Fund (“CREF”).
As of December 31, 2022, Nuveen managed approximately $1.1 trillion in assets,
of which approximately $147.7 billion was managed by the Adviser. The Adviser is
located at 333 West Wacker Drive, Chicago, Illinois 60606.
The
Adviser has selected its affiliate, Teachers Advisors, LLC (the “Sub-Adviser”),
to serve as sub-adviser to the Funds, responsible for the day-to-day management
of each Fund’s portfolio. As of December 31, 2022, the Sub-Adviser, a subsidiary
of Nuveen, managed approximately $335.3 billion in assets. The Sub-Adviser is
located at 730 Third Avenue, New York, New York 10017-3206.
The
portfolio managers for the Funds are Jim Campagna and Lei Liao.
|
|
|
|
|
|
|
|
Total
Experience (since
dates specified
below) |
Name
& Title
|
Experience
Over Past Five Years |
At
TIAA |
Total |
Philip
James (Jim) Campagna, CFA Managing
Director |
Teachers
Advisors, LLC, TIAA-CREF Investment Management, LLC and other advisory
affiliates of TIAA – 2005 to Present (portfolio management of domestic and
international large-, mid- and small-cap equity index and ESG
portfolios) |
2005 |
1991 |
Lei
Liao, CFA Managing
Director |
Teachers
Advisors, LLC, TIAA-CREF Investment Management, LLC and other advisory
affiliates of TIAA – 2012 to Present (portfolio management of domestic and
international large-, mid- and small-cap equity index and ESG
portfolios) |
2012 |
2005 |
Additional
information about the portfolio managers’ compensation, other accounts managed
by the portfolio managers and the portfolio managers’ ownership of securities in
the Funds is provided in the statement of additional information.
|
|
28 |
Section
3
Fund Management |
As
compensation for the services it provided to each Fund during the fiscal year
ended October 31, 2022, the Adviser received a management fee from the Fund
based on a percentage of the Fund’s average daily net assets, in the amounts set
forth below:
|
|
Fund
Name |
Management
Fee |
Nuveen
ESG International Developed Markets Equity ETF |
0.30% |
Nuveen
ESG Emerging Markets Equity ETF |
0.35% |
The
Adviser is responsible for substantially all other expenses of each Fund, except
any future distribution and/or service fees, interest expenses, taxes, acquired
fund fees and expenses, fees incurred in acquiring and disposing of portfolio
securities, fees and expenses of the independent trustees (including any
trustees’ counsel fees), certain compensation expenses of the Funds’ chief
compliance officer, litigation expenses and extraordinary expenses.
Information
regarding the Board’s approval of the investment management agreements is
available in the Fund’s annual report for the fiscal year ended October
31, 2022.
|
|
Section
3
Fund Management |
29 |
Section
4
Investing in the Funds
|
Purchase
and Sale of Shares |
Each
Fund is an ETF, which differs from a mutual fund in important ways. Shares of a
mutual fund are purchased and redeemed by all shareholders directly from the
issuing fund at NAV. By contrast, most investors will buy and sell shares of the
Funds through a broker on a national securities exchange, where each Fund’s
shares are listed and trade throughout the day at market prices like shares of
other publicly traded securities. The Funds do not impose any minimum investment
for shares of a Fund purchased on an exchange or otherwise in the secondary
market. Each Fund’s shares trade under the trading symbol listed on the cover of
this prospectus.
Purchasing
or selling shares of a Fund on an exchange or other secondary market typically
involves two types of costs. When purchasing or selling shares of a Fund through
a broker, you may incur a brokerage commission. The commission is frequently a
fixed amount and may be a significant proportional cost for investors seeking to
buy or sell small amounts of shares. In addition, you may incur the cost of the
“spread,” that is, any difference on the exchange between the bid price and the
ask price for a share of a Fund. The spread will vary over time based on a
Fund’s trading volume and market liquidity.
Each
Fund’s primary listing exchange is the Cboe BZX Exchange, Inc. (the
“Listing
Exchange”).
The Listing Exchange is open for trading Monday through Friday and is closed on
weekends and the following holidays: New Year’s Day, Martin Luther King, Jr.
Day, Presidents’ Day, Good Friday, Memorial Day, Juneteenth Holiday,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Book
Entry
Shares
of the Funds are held in book-entry form, which means that no stock certificates
are issued. The Depository Trust Company (“DTC”)
or its nominee is the record owner of all outstanding shares of the Funds and is
recognized as the owner of all shares for all purposes.
Investors
owning shares of a Fund are beneficial owners as shown on the records of DTC or
its participants. DTC serves as the securities depository for shares of the
Funds. DTC participants include securities brokers and dealers, banks, trust
companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
shares, you are not entitled to receive physical delivery of stock certificates
or to have shares registered in your name, and you are not considered a
registered owner of shares. Therefore, to exercise any right as an owner of
shares, you must rely upon the procedures of DTC and its participants. These
procedures are the same as those that apply to any other securities that you
hold in book-entry or “street name” form.
Share
Trading Prices
The
trading prices of a Fund’s shares on the Listing Exchange generally differ from
the Fund’s NAV and are affected by market forces such as the supply of and
demand for the Fund’s shares as well as the securities held by the Fund,
economic conditions and other factors. The price you pay or receive when you buy
or sell your shares in the secondary market is based on the market price of a
Fund’s shares, which may be more or less than the NAV of such shares.
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|
30 |
Section
4
Investing in the Funds |
Householding
Householding
is a method of delivery, based on the preference of the individual investor, in
which a single copy of certain shareholder documents can be delivered to
investors who share the same address, even if their accounts are registered
under different names. Please contact your broker-dealer if you are interested
in enrolling in householding and receiving a single copy of prospectuses and
other shareholder documents, or if you are currently enrolled in householding
and wish to change your householding status.
Investments
by Registered Investment Companies
Section
12(d)(1) of the 1940 Act restricts investments by registered investment
companies in the securities of other investment companies, including shares of
the Funds. Registered investment companies are permitted to invest in the Funds
beyond the limits set forth in Rule 12d1-4 under the 1940 Act, including that
such investment companies enter into an agreement with the Funds.
|
Purchase
and Redemption of Creation Units |
Only
certain institutional investors (typically market makers or other
broker-dealers) who have entered into agreements with Nuveen Securities, LLC,
the Funds’ distributor (the “Distributor”)
(“Authorized
Participants”),
may purchase and redeem shares directly from the Funds at NAV and only in large
blocks of shares or multiples thereof (“Creation
Units”).
Except when aggregated in Creation Units, shares are not redeemable by a Fund.
An Authorized Participant must be either a DTC participant or a member of the
Continuous Net Settlement System of the National Securities Clearing Corporation
(“NSCC”).
The
Funds generally issue and redeem Creation Units in exchange for a designated
in-kind basket of Fund securities and/or a designated amount of cash (together,
the “Basket”).
Each day the Listing Exchange is open for trading (a “Business
Day”),
prior to the opening of trading, each Fund publishes that day’s Basket through
NSCC or another method of public dissemination.
Orders
from Authorized Participants to create or redeem Creation Units may only be
placed on a Business Day and are subject to approval by the Distributor. The
prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received and deemed acceptable by the
Distributor.
Information
about the procedures regarding creation and redemption of Creation Units
(including the cut-off times for receipt of creation and redemption orders) is
included in the Funds’ statement of additional information.
Nuveen
Securities, LLC, the Funds’ distributor, distributes Creation Units for the
Funds on an agency basis. The Distributor does not maintain a secondary market
in shares of the Funds. The Distributor has no role in determining the policies
of the Funds or the securities that are purchased or sold by the Funds. The
Distributor’s principal address is 333 West Wacker Drive, Chicago, Illinois
60606.
|
|
Section
4
Investing in the Funds |
31 |
|
Distribution
and Service Payments |
Distribution
and Service Plan
Each
Fund has adopted a Distribution and Service Plan in accordance with Rule 12b-1
under the 1940 Act pursuant to which the Fund is authorized to pay fees at an
annual rate of up to 0.25% of the Fund’s average daily net assets for the sale
and distribution of the Fund’s shares. No distribution fees are currently
charged to the Funds; there are no plans to impose distribution fees, and no
such fees will be charged for at least twelve months from the date of this
prospectus. Additionally, the implementation of any such fees would require
approval by the Board prior to implementation. Because these fees would be paid
out of a Fund’s assets on an on-going basis, if such fees are charged in the
future, they would increase the cost of your investment and might cost you more
over time than paying other types of sales charges.
Other
Payments by the Adviser
The
Adviser and/or its affiliates may make payments to broker-dealers, registered
investment advisers, banks or other intermediaries (together, “intermediaries”)
related to marketing activities and presentations, educational training
programs, conferences, the development of technology platforms and reporting
systems, data provision services, or their making shares of the Funds and
certain other Nuveen ETFs available to their customers generally and in certain
investment programs. Such payments, which may be significant to the
intermediary, are not made by the Funds. Rather, such payments are made by the
Adviser and/or its affiliates from their own resources, which come directly or
indirectly in part from fees paid by the Nuveen ETFs complex. Payments of this
type are sometimes referred to as revenue-sharing payments. A financial
intermediary may make decisions about which investment options it recommends or
makes available, or the level of services provided, to its customers based on
the payments it is eligible to receive. Therefore, such payments to an
intermediary create conflicts of interest between the intermediary and its
customers and may cause the intermediary to recommend the Funds or other Nuveen
ETFs over another investment. More information regarding these payments is
contained in the Funds’ statement of additional information.
|
|
32 |
Section
4
Investing in the Funds |
The
Funds do not impose any restrictions on the frequency of purchases and
redemptions (“frequent
trading”);
however, the Funds reserve the right to reject or limit purchases at any time as
described in the statement of additional information. In determining that no
restrictions on frequent trading were necessary, the Board evaluated the risks
of frequent trading to the Funds and their shareholders. The Board considered
that a Fund’s shares can only be purchased and redeemed directly from the Fund
in Creation Units by Authorized Participants, and that the vast majority of
trading in the Funds’ shares occurs on the secondary market. Because secondary
market trades do not involve the Funds directly, the Board concluded that such
trades were unlikely to cause many of the harmful effects of frequent trading,
including dilution, disruption of portfolio management, increases in a Fund’s
trading costs and the realization of capital gains. With respect to purchases
and redemptions by Authorized Participants directly from the Funds that are
effected in-kind (i.e.,
for securities), the Board concluded that those trades do not have the potential
to cause the harmful effects that may result from frequent cash trades. To the
extent that a Fund may effect the purchase or redemption of Creation Units in
exchange wholly or partially for cash, the Board recognized that such trades
could result in dilution to the Fund and increased transaction costs, which
could negatively impact the Fund’s ability to achieve its investment objective.
However, the Board noted that direct trading by Authorized Participants is
critical to ensuring that a Fund’s shares trade at or close to NAV. In addition,
the Board recognized that the Funds impose fixed and variable transaction fees
on purchases and redemptions of Creation Units to cover the custodial and other
costs incurred by the Funds in effecting trades.
|
|
Section
4
Investing in the Funds |
33 |
Section
5
General Information
|
Dividends
and Distributions |
As
a Fund shareholder, you are entitled to your share of the Fund’s income and net
realized gains on its investments. Each Fund pays out substantially all of its
net earnings to its shareholders as dividends and distributions.
Each Fund
may earn interest from its investments in common stocks. These amounts, net of
expenses and taxes (if applicable), are passed along to Fund shareholders as
dividends. Dividends, if any, are declared and paid annually.
Each
Fund will generally realize short-term capital gains or losses whenever it sells
assets held for one year or less. Net short-term capital gains will generally be
treated as ordinary income when distributed to shareholders. Each Fund will
generally realize long-term capital gains or losses whenever it sells assets
held for more than one year. Net capital gains (the excess of a Fund’s net
long-term capital gains over its net short-term capital losses) are distributed
to shareholders once a year at year end.
Each
Fund reserves the right to declare special distributions if such action is
necessary or advisable to preserve its status as a regulated investment company
or to avoid imposition of income or excise taxes on undistributed income or
realized gains.
Your
broker is responsible for distributing any dividends and capital gain
distributions to you.
Dividend
Reinvestment Service
No
dividend reinvestment service is provided by the Funds. Broker-dealers may make
available the DTC book-entry Dividend Reinvestment Service for use by beneficial
owners of a Fund for reinvestment of their dividend distributions. Beneficial
owners should contact their broker to determine the availability and costs of
the service and the details of participation therein. Brokers may require
beneficial owners to adhere to specific procedures and timetables. If this
service is available and used, dividend distributions of both income and
realized gains will be automatically reinvested in additional whole shares of
the Funds purchased in the secondary market.
As
with any investment, you should consider how your investment in shares of the
Funds will be taxed. The tax information in this prospectus is provided as
general information, based on current laws, which may be changed by legislative,
judicial or administrative action. You should not consider this summary to be a
comprehensive explanation of the tax treatment of the Funds, or the tax
consequences of an investment in the Funds. There is no guarantee that shares of
the Funds will receive certain regulatory or accounting treatment. You should
consult your own tax professional about the tax consequences of an investment in
shares of the Funds. Unless your investment in Fund shares is made through a
tax-exempt entity or tax-deferred retirement account, such as an IRA, you need
to be aware of the possible tax consequences when the Funds make distributions,
you sell Fund shares, or (for Authorized Participants only) you purchase or
redeem Creation Units.
Taxes
and Tax Reporting
Each
Fund intends to qualify each year for treatment as a regulated investment
company. If it meets certain minimum distribution requirements, a regulated
investment
|
|
34 |
Section
5
General Information |
company
is not subject to tax at the fund level on income and gains from investments
that are timely distributed to shareholders. However, a Fund’s failure to
qualify as a regulated investment company or to meet minimum distribution
requirements would result (if certain relief provisions were not available) in
fund-level taxation and, consequently, a reduction in income available for
distribution to shareholders.
Each
Fund intends to make distributions that may be taxed as ordinary income or
capital gains. Distributions of a Fund’s net capital gain are taxable as
long-term capital gains regardless of how long you have owned your shares. For
non-corporate shareholders, long-term capital gains are generally taxable at tax
rates up to 20% (lower tax rates apply to individuals in lower tax brackets),
while distributions from short-term capital gains and net investment income are
generally taxable as ordinary income. The tax you pay on a given capital gains
distribution depends generally on how long the Fund has held the portfolio
securities it sold and not on how long you have owned your Fund shares.
Dividends
that are reported by a Fund as qualified dividend income are generally taxable
to non-corporate shareholders at tax rates of up to 20% (lower rates apply to
individuals in lower tax brackets). Qualified dividend income generally is
income derived from dividends paid to a Fund by U.S. corporations or certain
foreign corporations that are either incorporated in a U.S. possession or
eligible for tax benefits under certain U.S. income tax treaties. In addition,
dividends that a Fund receives in respect of stock of certain foreign
corporations may be qualified dividend income if that stock is readily tradable
on an established U.S. securities market. For dividends to be taxed as qualified
dividend income to a non-corporate shareholder, a Fund must satisfy certain
holding period requirements with respect to the underlying stock and the
non-corporate shareholder must satisfy holding period requirements with respect
to his or her ownership of Fund shares. Holding periods may be suspended for
these purposes for stock that is hedged. The Fund’s investment strategies may
limit their ability to distribute dividends eligible to be treated as qualified
dividend income.
The
sale of shares in your account may produce a gain or loss, and is a taxable
event. Any capital gain or loss realized upon a sale of Fund shares is
generally treated as a long-term gain or loss if you held the shares you sold
for more than one year. Any capital gain or loss realized upon a sale of Fund
shares held for one year or less is generally treated as a short-term gain or
loss, except that any capital loss on a sale of shares held for six months or
less is treated as a long-term capital loss to the extent of long-term capital
gain dividends paid with respect to such shares. The ability to deduct capital
losses may be limited depending on your circumstances.
In
general, your distributions are subject to federal income tax for the year in
which they are paid. Distributions paid in January, but declared and payable to
shareholders of record in October, November or December of the prior year,
however, may be taxable to you in the prior year. Distributions are generally
taxable even if they are paid from income or gains earned by a Fund before your
investment (and thus were included in the price you paid for your shares).
REITs
in which a Fund may invest often do not provide complete and final tax
information to a Fund until after the time that a Fund issues a tax reporting
statement. As a result, a Fund may at times find it necessary to reclassify the
amount and character of its distributions after it issues a tax reporting
statement. If this were to occur, the financial intermediary with whom you hold
your shares will send you a corrected, final Form 1099-DIV to reflect the
reclassified information.
|
|
Section
5
General Information |
35 |
Early
in each year, you will receive a statement from the firm through which you hold
your Fund shares detailing the amount and nature of all distributions that you
were paid during the prior year. The tax status of your distributions is
the same whether you reinvest them or elect to receive them in cash.
Dividends
and distributions from the Funds and capital gain on the sale of Fund shares are
generally taken into account in determining a shareholder’s “net investment
income” for purposes of the Medicare contribution tax applicable to certain
individuals, estates and trusts.
When
seeking to satisfy redemption requests in whole or in part on a cash basis, a
Fund may be required to sell portfolio securities in order to obtain the cash
needed to distribute redemption proceeds. This may cause a Fund to recognize
investment income and/or capital gains or losses that it might not have
recognized if it had completely satisfied the redemption in-kind. As a result, a
Fund may be less tax efficient if it includes such a cash payment than if the
in-kind redemption process were used.
Distributions
(other than capital gain dividends) paid to individual shareholders that are
neither citizens nor residents of the U.S. or to foreign entities will generally
be subject to a U.S. withholding tax at the rate of 30%, unless a lower treaty
rate applies. Gains realized by foreign shareholders from the sale or other
disposition of shares of a Fund generally are not subject to U.S. taxation,
unless the recipient is an individual who is physically present in the U.S. for
183 days or more per year. A Fund may, under certain circumstances, report all
or a portion of a dividend as an “interest-related dividend” or a “short-term
capital gain dividend,” which would generally be exempt from this 30% U.S.
withholding tax, provided certain other requirements are met. Different tax
consequences may result if you are a foreign shareholder engaged in a trade or
business within the United States or if you are a foreign shareholder entitled
to claim the benefits of a tax treaty.
Please
note that if you do not furnish the Fund with your correct Social Security
number or employer identification number, you fail to provide certain
certifications to the Fund, you fail to certify whether you are a U.S. citizen
or a U.S. resident alien, or the Internal Revenue Service notifies the Fund to
withhold, federal law requires the Fund to withhold federal income tax from your
distributions and redemption proceeds at the applicable withholding rate.
Qualified
Business Income
A
portion of the Fund’s portfolio holdings may consist of REITs. For tax years
beginning after December 31, 2017, the Tax Cuts and Jobs Act generally would
allow a non-corporate taxpayer a deduction equal to the investor’s combined
qualified business income, which would include 20% of the investor’s qualified
REIT dividends. Treasury has issued regulations that allow regulated investment
companies (“RICs”) such as a Fund to report a portion of their distributions
that relate to dividends received from REITs as qualified REIT dividends
eligible for the 20% deduction. The total amount of Fund distributions that
qualify for this deduction is disclosed to investors on their Forms 1099-DIV,
which are made available in February after the close of a calendar year.
Buying
or Selling Shares Close to a Record Date
Buying
Fund shares shortly before the record date for a taxable dividend or capital
gain distribution is commonly known as “buying the dividend” and generally
should be avoided by taxable investors. The entire distribution may be taxable
to you even though a portion of the distribution effectively represents a return
of your purchase price.
|
|
36 |
Section
5
General Information |
Cost
Basis Method
You
may elect a cost basis method to apply to shares held in your account with your
financial intermediary. The cost basis method you select will determine the
order in which such shares are sold and how your cost basis information is
calculated and subsequently reported to you and to the Internal Revenue Service.
Please consult your tax advisor to determine which cost basis method best suits
your specific situation. Please contact your financial intermediary for
instructions on how to make your election. If you do not make an election, your
financial intermediary will choose its own default cost basis method.
Taxes
on Creation and Redemption of Creation Units
An
Authorized Participant having the U.S. dollar as its functional currency for
U.S. federal income tax purposes that exchanges securities for Creation Units
generally will recognize a gain or loss equal to the difference between
(i) the sum of the market value of the Creation Units at the time of the
exchange and any amount of cash received by the Authorized Participant in the
exchange and (ii) the sum of the exchanger’s aggregate basis in the
securities surrendered and any amount of cash paid for such Creation Units. An
Authorized Participant who redeems Creation Units will generally recognize a
gain or loss equal to the difference between the exchanger’s basis in the
Creation Units and the sum of the aggregate U.S. dollar market value of the
securities plus the amount of any cash received for such Creation Units. The
Internal Revenue Service, however, may assert that a loss that is realized upon
an exchange of securities for Creation Units may not be currently deducted under
the rules governing “wash sales” (for a person who does not mark-to-market its
holdings), or on the basis that there has been no significant change in economic
position.
Gain
or loss recognized by an Authorized Participant upon an issuance of Creation
Units in exchange for securities, or upon a redemption of Creation Units, may be
capital or ordinary gain or loss depending on the circumstances. Any capital
gain or loss realized upon an issuance of Creation Units in exchange for
securities will generally be treated as long-term capital gain or loss if the
securities have been held for more than one year. Any capital gain or loss
realized upon the redemption of a Creation Unit will generally be treated as
long-term capital gain or loss if the Fund shares comprising the Creation Unit
have been held for more than one year. Otherwise, such capital gains or losses
are treated as short-term capital gains or losses.
Persons
exchanging securities for Creation Units should consult their own tax advisors
with respect to the tax treatment of any creation or redemption transaction and
whether the wash sales rules apply and when a loss might be deductible. If you
purchase or redeem Creation Units, you will be sent a confirmation statement
showing how many Fund shares you purchased or redeemed and at what price.
Foreign
Investments by the Fund
Dividends,
interest and other income received by the Funds with respect to foreign
securities may give rise to withholding and other taxes imposed by foreign
countries. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes. The Funds may need to file special claims for
refund to secure the benefit of a reduced rate. If as of the close of a taxable
year more than 50% of the total assets of a Fund consist of stock or securities
of foreign corporations, the Fund may elect to “pass through” to investors the
amount of foreign income and similar taxes (including withholding taxes) paid by
the Fund during that taxable year. If a Fund elects to “pass through” such
foreign taxes, then investors will be considered to have received as additional
income their respective shares of such foreign taxes, but may be entitled
to
|
|
Section
5
General Information |
37 |
either
a corresponding tax deduction in calculating taxable income, or, subject to
certain limitations, a credit in calculating federal income tax.
The
foregoing discussion summarizes some of the consequences under current U.S.
federal tax law of an investment in the Funds. It is not a substitute for
personal tax advice. You may also be subject to state and local taxation on Fund
distributions and sales of shares. Consult your personal tax advisor about the
potential tax consequences of an investment in shares of the Funds under all
applicable tax laws.
Each
Fund’s NAV is determined as of the close of trading (normally 4:00 p.m. New
York time) on the New York Stock Exchange (“NYSE”)
on each Business Day. Each Fund’s NAV per share is calculated by taking the
value of the Fund’s total assets, including interest or dividends accrued but
not yet collected, less all liabilities, and dividing by the total number of
shares outstanding. Each Fund’s latest NAV per share is available on the Fund’s
website at www.nuveen.com/etf.
In
determining NAV, exchange-traded instruments generally are valued at the last
reported sales price or official closing price on an exchange, if available. If
such market quotations are not readily available or are not considered reliable,
an exchange-traded instrument will be valued at its fair value as determined in
good faith using procedures approved by the Adviser, subject to the oversight
and review of the Board. For example, the fair value of an exchange-traded
instrument may be determined using prices provided by independent pricing
services or obtained from other sources, such as broker-dealer quotations.
Independent pricing services typically value non-exchange-traded instruments
utilizing a range of market-based inputs and assumptions, including readily
available market quotations obtained from broker-dealers making markets in such
instruments, cash flows, and transactions for comparable instruments. In pricing
certain instruments, the pricing services may consider information about an
instrument’s issuer or market activity provided by the Adviser or
Sub-Adviser.
The
Funds invest in non-U.S. securities. Generally, trading in non-U.S. securities
is substantially completed each day at various times prior to the close of
business on the NYSE. The values of such securities used in computing the NAV of
the Funds are determined as of such times. The values of non-U.S. dollar
denominated securities are converted to U.S. dollars using foreign currency
exchange rates generally determined as of 4:00 p.m., London time. The value of
non-U.S. securities held by the Funds may change on days when investors are not
able to purchase or sell Fund shares.
The
price of an exchange-traded instrument may be determined unreliable in various
circumstances. For example, a price may be deemed unreliable if it has not
changed for an identified period of time, or has changed from the previous day’s
price by more than a threshold amount, and recent transactions and/or broker
dealer price quotations differ materially from the price in question.
The
Board has designated the Adviser as the Funds’ valuation designee pursuant to
Rule 2a-5 under the 1940 Act and delegated to the Adviser the day-to-day
responsibility of making fair value determinations. All fair value
determinations made by the Adviser are subject to review by the Board. As a
general principle, the fair value of a portfolio instrument is the amount that
an owner might reasonably expect to receive upon the instrument’s current sale.
A range of factors and analysis may be considered when determining fair value,
including relevant market data, interest rates, credit considerations and/or
issuer specific news. However, fair valuation involves subjective judgments, and
it is possible that the fair value determined for a portfolio instrument
may
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|
38 |
Section
5
General Information |
be
materially different from the value that could be realized upon the sale of that
instrument.
|
Premium/Discount
Information |
Information
showing the number of days the market price of each Fund’s shares was greater
than the Fund’s NAV per share (i.e.,
at a premium) and the number of days it was less than the Fund’s NAV per share
(i.e.,
at a discount) are made available on the Funds’ website at
www.nuveen.com/etf.
Brown
Brothers Harriman (“BBH”)
is the administrator, custodian and transfer agent for the Funds.
The
Funds are not sponsored, endorsed, sold or promoted by MSCI or any affiliate of
MSCI. Neither MSCI nor any other party makes any representation or warranty,
express or implied, to the owners of the Funds or any member of the public
regarding the advisability of investing in funds generally or in the Funds
particularly or the ability of the Indexes to track general stock market
performance. MSCI is the licensor of certain trademarks, service marks and trade
names of MSCI and of the Indexes, each of which is determined, composed and
calculated by MSCI without regard to the issuer of the Funds or the Funds. MSCI
has no obligation to take the needs of the issuer of the Funds or the owners of
the Funds into consideration in determining, composing or calculating the
Indexes. MSCI is not responsible for, and has not participated in, the
determination of the timing of, prices at, or quantities of the Funds to be
issued or in the determination or calculation of the equation by which the Funds
are redeemable for cash. Neither MSCI nor any other party has any obligation or
liability to owners of the Funds in connection with the administration,
marketing or trading of the Funds.
ALTHOUGH
MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN THE CALCULATION OF
THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS RELIABLE, NEITHER MSCI NOR ANY
OTHER PARTY GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEXES OR
ANY DATA INCLUDED THEREIN. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, LICENSEE’S
CUSTOMERS AND COUNTERPARTIES, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY
FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE
RIGHTS LICENSED HEREUNDER OR FOR ANY OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY
MAKES ANY EXPRESS OR IMPLIED WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT
TO THE INDEXES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY FOR ANY
DIRECT, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER DAMAGES
(INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
DAMAGES.
The
Index, which is owned, calculated and controlled by MSCI, incorporates ESG
criteria initially established by the Sub-Adviser. TIAA has licensed its name to
MSCI for use in the name of each Index.
|
|
Section
5
General Information |
39 |
Shares
of the Funds are not sponsored, endorsed or promoted by the Listing Exchange.
The Listing Exchange makes no representation or warranty, express or implied, to
the owners of shares of the Funds or any member of the public regarding the
ability of a Fund to track the total return performance of its Index or the
ability of the Index to track the total return performance. The Listing Exchange
is not responsible for, nor has it participated in, the determination of the
compilation or the calculation of the Indexes, nor in the determination of the
timing of, prices of or quantities of shares of the Funds to be issued, nor in
the determination or calculation of the equation by which the shares are
redeemable. The Listing Exchange has no obligation or liability to owners of
shares of the Funds in connection with the administration, marketing or trading
of shares of the Funds. The Listing Exchange does not guarantee the accuracy
and/or the completeness of the Indexes or any data included therein. The Listing
Exchange makes no warranty, express or implied, as to results to be obtained by
the Trust, on behalf of the Funds as licensees, licensees’ customers and
counterparties, owners of shares of the Funds or any other person or entity,
from the use of the Indexes or any data included therein in connection with the
rights licensed as described herein or for any other use.
The
Listing Exchange makes no express or implied warranties and hereby expressly
disclaims all warranties of merchantability or fitness for a particular purpose
with respect to the Indexes or any data included therein. Without limiting any
of the foregoing, in no event shall the Listing Exchange have any liability for
any direct, indirect, special, punitive, consequential or any other damages
(including lost profits) even if notified of the possibility of such
damages.
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|
40 |
Section
5
General Information |
Section
6
Financial Highlights
The
financial highlights table is intended to help you understand each Fund’s
financial performance for the past five fiscal years. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in a Fund (assuming reinvestment of all dividends and
distributions).
This
has been derived from information that has been audited by KPMG LLP, whose
report for the most recent fiscal year, along with each Fund’s financial
statements, are included in the annual report, which is available upon
request.
Selected
data for a share outstanding throughout the period:
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|
|
|
|
|
|
|
|
|
Investment
Operations |
|
Less
Distributions |
|
|
Year
Ended October
31, |
Beginning NAV |
Net Investment Income (Loss)(a) |
Net Realized/ Unrealized Gain
(Loss) |
|
Total |
|
From Net Investment Income |
From Accumulated Net
Realized Gains |
Total |
Ending NAV |
Ending Market Price |
NUDM |
|
|
|
|
|
|
|
|
|
|
|
2022 |
$32.30 |
$0.78 |
$(8.26 |
) |
$(7.48 |
) |
$(0.88) |
$(0.45) |
$(1.33) |
$23.49 |
$23.51 |
2021 |
24.33 |
0.98 |
7.42 |
|
8.40 |
|
(0.43) |
- |
(0.43) |
32.30 |
32.53 |
2020 |
26.74 |
0.54 |
(2.03 |
) |
(1.49 |
) |
(0.92) |
- |
(0.92) |
24.33 |
24.50 |
2019 |
24.10 |
0.75 |
2.44 |
|
3.19 |
|
(0.55) |
- |
(0.55) |
26.74 |
26.86 |
2018 |
26.39 |
0.71 |
(2.87 |
) |
(2.16 |
) |
(0.12) |
(0.01) |
(0.13) |
24.10 |
24.12 |
NUEM |
|
|
|
|
|
|
|
|
|
|
|
2022 |
34.14 |
0.69 |
(11.27 |
) |
(10.58 |
) |
(0.38) |
(0.41) |
(0.79) |
22.77 |
22.71 |
2021 |
29.18 |
0.52 |
4.86 |
|
5.38 |
|
(0.42) |
- |
(0.42) |
34.14 |
34.15 |
2020 |
25.57 |
0.40 |
3.75 |
|
4.15 |
|
(0.54) |
- |
(0.54) |
29.18 |
29.37 |
2019 |
23.78 |
0.58 |
1.70 |
|
2.28 |
|
(0.49) |
- |
(0.49) |
25.57 |
25.71 |
2018 |
27.69 |
0.59 |
(4.31 |
) |
(3.72 |
) |
(0.18) |
(0.01) |
(0.19) |
23.78 |
23.92 |
|
|
Section
6
Financial Highlights |
41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental
Data |
|
|
|
Total
Return |
|
|
|
Ratios
to Average Net Assets |
|
|
|
|
Based on NAV(b) |
|
Based on Market Price(b) |
|
Ending Net Assets (000) |
Expenses |
|
Net Investment Income
(Loss) |
|
Portfolio Turnover Rate(c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(24.17 |
)% |
(24.57 |
)% |
$267,756 |
0.31 |
% |
2.93 |
% |
62 |
% |
|
34.83 |
|
34.73 |
|
161,503 |
0.39 |
|
3.16 |
|
64 |
|
|
(5.91 |
) |
(5.67 |
) |
53,520 |
0.40 |
|
2.17 |
|
66 |
|
|
13.71 |
|
14.10 |
|
66,853 |
0.40 |
|
3.03 |
|
57 |
|
|
(8.25) |
|
(8.79 |
) |
43,384 |
0.40 |
|
2.71 |
|
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(31.62 |
) |
(31.88 |
) |
177,614 |
0.36 |
|
2.45 |
|
63 |
|
|
18.45 |
|
17.77 |
|
122,896 |
0.44 |
|
1.49 |
|
61 |
|
|
16.41 |
|
16.47 |
|
46,695 |
0.45 |
|
1.56 |
|
81 |
|
|
9.68 |
|
9.70 |
|
56,255 |
0.45 |
|
2.30 |
|
53 |
|
|
(13.55 |
) |
(14.18 |
) |
35,676 |
0.45 |
|
2.12 |
|
65 |
|
(a) Per
share Net Investment Income (Loss) is calculated using the average daily shares
method.
(b) Total
Return Based on NAV reflects the change in NAV over the period, including the
assumed reinvestment of distributions, if any, at NAV on each ex-dividend
payment date during the period. Total Return Based on Market Price reflects the
change in the market price per share over the period, including the assumed
reinvestment of distributions, if any, at the ending market price per share on
each ex-dividend payment date during the period. Total returns are not
annualized.
(c) Portfolio
Turnover Rate is calculated based on the lesser of long-term purchases or sales
divided by the average long-term market value during the period. Portfolio
Turnover Rate excludes securities received or delivered as a result of
processing in-kind creations or redemptions of Fund shares.
|
|
42 |
Section
6
Financial Highlights |
![[image]](g423833g1img_a3b17497bc3e4.jpg)
Several
additional sources of information are available to you, including the codes of
ethics adopted by the Funds, Nuveen, the Adviser and the Sub-Adviser. The
statement of additional information, incorporated by reference into this
prospectus, contains detailed information on the policies and operation of the
Funds included in this prospectus. Additional information about the Funds’
investments will be available in the annual and semi-annual reports to
shareholders. In the Funds’ annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected each
Fund’s performance during its last fiscal year. The Funds’ most recent statement
of additional information, annual and semi-annual reports and certain other
information are available, free of charge, by calling Nuveen Investor Services
at (888) 290-9881, on the Funds’ website at www.nuveen.com/etf, or through your
financial advisor. Shareholders may call the toll free number above with
any inquiries.
You
may also obtain this and other Fund information directly from the SEC. Reports
and other information about the Funds are available on the EDGAR Database on the
SEC’s website at http://www.sec.gov. You may also request Fund information by
sending an e-mail request to publicinfo@sec.gov. The SEC may charge a copying
fee for this information.
Distributed
by
Nuveen
Securities, LLC
333
West Wacker Drive
Chicago,
Illinois 60606
www.nuveen.com/etf
No
person has been authorized to give any information or to make any
representations other than those contained in this prospectus in connection with
the offer of Fund shares, and, if given or made, the information or
representations must not be relied upon as having been authorized by the Funds.
Neither the delivery of this prospectus nor any sale of Fund shares shall under
any circumstance imply that the information contained herein is correct as of
any date after the date of this prospectus. Please read and keep this prospectus
for future reference.
Dealers
effecting transactions in Fund shares, whether or not participating in this
distribution, are generally required to deliver a prospectus. This is in
addition to any obligation of dealers to deliver a prospectus when acting as
underwriters.
The
Funds are a series of Nushares ETF Trust, whose Investment Company Act file
number is 811-23161.