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
Dividend Growth ETF |
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NYSE
Arca |
NDVG |
Nuveen
Growth Opportunities ETF |
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NYSE
Arca |
NUGO |
Nuveen
Small Cap Select ETF |
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NYSE
Arca |
NSCS |
Nuveen
Winslow Large-Cap Growth ESG ETF |
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NYSE
Arca |
NWLG |
THESE
ETFs ARE DIFFERENT FROM TRADITIONAL ETFs
Traditional
ETFs tell the public what assets they hold each day. These ETFs will not. This
may create additional
risks
for your investment. For example:
· You
may have to pay more money to trade these ETFs’ shares. These ETFs will provide
less information to traders, who tend to charge more for trades when they have
less information.
· The
price you pay to buy ETF shares on an exchange may not match the value of the
ETF’s portfolio. The same is true when you sell shares. These price differences
may be greater for these ETFs compared to other ETFs because it provides less
information to traders.
· These
additional risks may be even greater in bad or uncertain market
conditions.
· Each
ETF will publish on its website each day a Proxy Portfolio (“Proxy Portfolio”)
designed to help trading in shares of the ETF. While the Proxy Portfolio
includes some of the ETF’s holdings, it is not the ETF’s actual
portfolio.
The
differences between these ETFs and other ETFs may also have advantages. By
keeping certain information about the ETFs secret, these ETFs may face less risk
that other traders can predict or copy their investment strategies. This may
improve the ETFs’ performance. If other traders are able to copy or predict the
ETFs’ investment strategies, however, this may hurt the ETFs’ performance.
For
additional information regarding the unique attributes and risks of these ETFs,
see the later discussion with respect to the Proxy Portfolios in the Funds’
principal investment strategies and associated risks, including
“Proxy Portfolio Structure Risk,” “Authorized Participant
Concentration Risk,” “Predatory
Trading Practices Risk,” “Premium/Discount Risk,” “Trading Issues Risk” and
“Tracking Error Risk,” as well as the “Investing in the Funds—Purchase and Sale
of Fund Shares” and “Proxy Portfolio and Proxy Overlap” sections set forth below
and the “Proxy Portfolio” and “Disclosure of Portfolio Holdings” sections in the
Funds’ statement of additional information.
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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
Dividend Growth ETF
Investment
Objective
The
investment objective of the Fund is to seek an attractive total return comprised
of income from dividends and long-term capital
appreciation.
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 |
0.64% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.64% |
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 |
$65 |
3
Years |
$205 |
5
Years |
$357 |
10
Years |
$798 |
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
12% of the average value of its
portfolio.
Principal
Investment Strategies
Under normal market conditions, the
Fund invests at least 80% of the sum of its net assets in dividend-paying
exchange-traded equity securities, which include common stocks and preferred
securities. Companies in certain economic sectors of the market
have historically provided higher dividend yields than companies in other
sectors and industries. As a result, given the Fund’s focus on dividend-paying
securities, the Fund may, from time to time, have a greater exposure to these
higher dividend-yield sectors and industries than the broad equity market. The
Fund defines dividend-paying equities as equity securities that have paid a
dividend within the trailing twelve months and/or announced a dividend to be
paid in the next twelve months at the time of
purchase.
The
Fund may invest in small-, mid- and large-cap companies. The Fund may invest up
to 25% of its net assets in exchange-traded American Depositary Receipts
(“ADRs”)
and common stocks of non-U.S. issuers that are listed and trade on a foreign
exchange contemporaneously with Fund
shares.
Non-Transparent
ETF with Proxy Portfolio Structure. The
Fund is a type of exchange-traded fund (“ETF”).
Unlike traditional ETFs, however, which generally publish their portfolio
holdings on a daily basis, the Fund discloses a portfolio transparency
substitute—the “Proxy
Portfolio”—
and certain related information about the relative performance of the
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2 |
Section
1
Fund Summaries |
Proxy
Portfolio and the Fund’s actual portfolio (“Actual
Portfolio”)
holdings (the “Proxy
Portfolio Disclosures”),
which are intended to help keep the market price of the Fund’s shares trading at
or close to the underlying net asset value (“NAV”)
per share of the Fund. While the Proxy Portfolio includes some of the Fund’s
holdings, it is not the Fund’s Actual Portfolio, and the Fund will not disclose
the daily holdings of the Actual Portfolio. Although the Fund seeks to benefit
from keeping its portfolio information secret, market participants may attempt
to use the Proxy Portfolio to identify the Fund’s trading strategy, which if
successful, could result in such market participants engaging in certain
predatory trading practices that may have the potential to harm the Fund and its
shareholders. The Fund’s exemptive relief limits the types of securities in
which the Fund can invest, which may constrain the Fund’s ability to implement
its investment strategies. The Fund is actively managed and does not intend to
track an 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. Each risk
summarized below is considered a “principal risk” of investing in the Fund,
regardless of the order in which it
appears.
Proxy
Portfolio Structure Risk—Unlike
traditional ETFs that provide daily disclosure of their portfolio holdings, the
Fund does not disclose the daily holdings of the Actual Portfolio. Instead,
the Fund discloses a Proxy Portfolio that is designed to reflect the economic
exposure and risk characteristics of the Fund’s Actual Portfolio on any given
trading day. Although the Proxy Portfolio and Proxy Portfolio Disclosures are
intended to provide Authorized Participants (defined below) and other market
participants with enough information to allow them to engage in effective
arbitrage transactions
that
will keep the market price of the Fund’s shares trading at or close to the
underlying NAV per share of the Fund, while at the same time enabling them to
establish cost-effective hedging strategies to reduce risk, there is a risk that
market prices will vary significantly from the underlying NAV of the Fund. See
“Premium/Discount Risk.” Similarly, shares of the Fund may trade at a wider
bid/ask spread than shares of traditional ETFs, and may therefore be more costly
for investors to trade. See “Trading Issues Risk.” Also, the Fund will incur
expenses to license the Proxy Portfolio mechanism, which may impact shareholder
returns. Additionally, the proxy mechanism itself may result in additional
trading costs, which also may negatively impact shareholder returns. In
addition, although the Proxy Portfolio is designed to protect the Fund from
predatory practices such as front-running and free-riding, market participants
may nevertheless be able to use the Proxy Portfolio and Proxy Portfolio
Disclosures to engage in trading practices that disadvantage the Fund. See
“Predatory Trading Practices Risk.” The Fund will monitor on an ongoing basis
the premium/discount between the market price and the NAV of the Fund’s shares,
but there can be no assurance that the Proxy Portfolio methodology will operate
as intended. The Proxy Portfolio methodology is novel and not yet proven as an
effective arbitrage mechanism. The effectiveness of the Proxy Portfolio
methodology as an arbitrage mechanism is contingent upon, among other things,
the effectiveness of the Fund’s Factor Model analysis in creating a Proxy
Portfolio that performs in a manner substantially identical to the performance
of the Fund’s Actual Portfolio and the willingness of Authorized Participants
and other market participants to trade based on the Proxy Portfolio. In the
event that the Proxy Portfolio methodology does not result in effective
arbitrage opportunities in the Fund shares, the Fund may exhibit wider
premiums/discounts, bid/ask spreads and tracking error. At certain thresholds
for such premiums/discounts, bid/ask spreads and tracking error, the Fund’s
Board of Trustees will consider possible remedial measures, which may include
liquidation or conversion to a fully-transparent, active ETF or a mutual
fund.
· Premium/Discount
Risk—Shares
of the Fund are listed for trading on the NYSE Arca, Inc. (the “NYSE
Arca”)
and are bought and sold in the secondary market at market prices that may
differ from their most recent NAV. The market value of the Fund’s shares will
fluctuate, in some cases materially, in response to changes in the Fund’s
NAV, the intraday value of the Fund’s holdings, and the relative supply and
demand for the Fund’s shares on the exchange. Although the Proxy Portfolio
is intended to provide investors with enough information to allow for an
effective arbitrage mechanism that will keep the market price of the Fund at or
close to the Fund’s NAV, there is a risk (which may increase during periods of
market disruption or volatility) that market prices for Fund shares will vary
significantly from the Fund’s NAV. This risk may be greater for the Fund than
for traditional ETFs that disclose their full portfolio holdings on a daily
basis because the publication of the Proxy Portfolio does not provide the same
level of transparency as the publication of the full portfolio by a fully
transparent active ETF. This could cause the Fund’s shares to have wider bid/ask
spreads and larger premiums/discounts than fully transparent ETFs using the
same investment strategies. Disruptions to creations and redemptions, the
existence of extreme market volatility or potential lack of an active trading
market for shares may result in shares trading at a significant premium or
discount to NAV and/or in a reduced liquidity of your investment. During such
periods, you may be unable to sell your shares or may incur significant losses
if you sell your shares. There are various methods by which investors can
purchase and sell shares and various types of orders that may be placed.
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Section
1
Fund Summaries |
3 |
Investors
should consult their financial intermediary before purchasing or selling shares
of the Fund. If a shareholder purchases shares at a time when the market price
is at a premium to the NAV or sells shares at a time when the market price is at
a discount to the NAV, the shareholder may sustain
losses.
· Authorized
Participant Concentration Risk—Only
certain institutional investors (typically market makers or other
broker-dealers) (“Authorized
Participants”)
may engage in creation or redemption transactions directly with the Fund.
The Fund has a limited number of institutions that act as Authorized
Participants, none of which are or will be obligated to engage in creation
or redemption transactions. To the extent that these institutions exit the
business or are unable to process creation and/or redemption orders with
respect to the Fund and no other Authorized Participant is able to step forward
to create or redeem Creation Units, Fund shares may trade at a discount
to NAV and possibly face trading halts and/or delisting. The Fund’s
novel structure may affect the number of entities willing to act as
Authorized Participants, and this risk may be exacerbated during times of market
stress.
· Predatory
Trading Practices Risk—Although
the Fund seeks to benefit from keeping its portfolio holdings information
secret, market participants may attempt to use the Proxy Portfolio and
related Proxy Portfolio Disclosures to identify the Fund’s holdings and trading
strategy. If successful, this could result in such market participants engaging
in predatory trading practices that could harm the Fund and its shareholders.
The Proxy Portfolio and related Proxy Portfolio Disclosures have been
designed to mitigate the risk that market participants could “reverse engineer”
the Fund’s portfolio and investment strategy, but they may not be
successful in this regard.
· Trading
Issues Risk—Trading
in Fund shares on the NYSE Arca may be halted in certain circumstances. If 10%
or more of the Fund’s Actual Portfolio does not have readily available
market quotations, the Fund will promptly request that the NYSE Arca halt
trading in the Fund’s shares. Such trading halts may have a greater impact
on the Fund compared to other ETFs due to its lack of transparency. If the
trading of a security held in the Fund’s Actual Portfolio is halted or
otherwise does not have readily available market quotations and the sub-adviser
believes that the lack of any such readily available market quotations may
affect the reliability of the Proxy Portfolio as an arbitrage vehicle or
otherwise determines it is in the best interest of the Fund, the
sub-adviser promptly will disclose on the Fund’s website the identity and
weighting of such security for so long as such security’s trading is halted or
otherwise does not have readily available market quotations and remains in
the Actual Portfolio. There can be no assurance that the requirements of the
NYSE Arca necessary to maintain the listing of the Fund will continue to be
met. Because the Fund trades on the basis of a published Proxy Portfolio, it may
trade at a wider bid/ask spread and may experience a wider premium/discount than
traditional ETFs that publish their portfolios on a daily basis, and therefore,
may cost investors more to trade especially during periods of market disruption
or volatility.
· Tracking
Error Risk—Although
the Proxy Portfolio is designed to reflect the economic exposure and risk
characteristics of the Fund’s Actual Portfolio on any given trading day,
there is a risk that the performance of the Proxy Portfolio will diverge from
the performance of the Actual Portfolio, potentially
materially.
Active
Management Risk—The
Fund’s sub-adviser actively manages the Fund’s investments. Consequently, the
Fund is subject to the risk that the investment techniques and risk analyses
employed by the Fund’s sub-adviser may not produce the desired results. This
could cause the Fund to lose value or its investment results to lag relevant
benchmarks or other funds with similar objectives.
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.
Dividend-Paying
Security Risk—The
Fund’s investment in dividend-paying securities could cause the Fund to
underperform similar funds that invest without consideration of a company’s
track record of paying dividends. Securities of
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4 |
Section
1
Fund Summaries |
companies
with a history of paying dividends may not participate in a broad market advance
to the same degree as most other securities, and a sharp rise in interest rates
or economic downturn could cause a company to unexpectedly reduce or eliminate
its dividend. There is no guarantee that the issuers of the securities held by
the Fund will declare dividends in the future or that, if declared, they will
remain at their current levels or increase over
time.
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.
Holders of common stock generally are subject to more risks than holders of
preferred securities because the status of common stockholders upon the
bankruptcy of the issuer is subordinated to that of preferred security holders.
Given the Fund’s focus on dividend-paying securities, the Fund may, from time to
time, have a greater exposure to higher dividend-yield sectors and industries
than the broad equity market which would make the Fund more vulnerable to
adverse developments affecting such sectors or
industries.
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.
Market
Risk—The
market value of the Fund’s investments may go up or down, sometimes rapidly or
unpredictably and for short or extended periods of time, due to the particular
circumstances of individual issuers or due to general conditions impacting
issuers more broadly. Global economies and financial markets have become highly
interconnected, and thus economic, market or political conditions or events in
one country or region might adversely impact the value of the Fund’s investments
whether or not the Fund invests in such country or region. Events such as war,
terrorism, natural and environmental disasters and the spread of infectious
illnesses or other public health emergencies may have a severe negative impact
on the global economy, could cause financial markets to experience extreme
volatility and losses, and could result in the disruption of trading and the
reduction of liquidity in many instruments. Additionally, as inflation
increases, the value of the Fund’s assets can
decline.
Market
Trading Risks—The
Fund is an 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 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. 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.
Preferred
Security Risk—Preferred
securities generally are subordinated to bonds and other debt instruments in a
company’s capital structure and therefore will be subject to greater credit risk
than those debt instruments. In addition, preferred securities are subject to
other risks, such as having no or limited voting rights, being subject to
special redemption rights, having distributions deferred or skipped, having
floating interest rates or dividends, which may result in a decline in value in
a falling interest rate environment, having fixed interest rates or dividends,
which may result in a decline in value in a rising interest rate environment,
having limited liquidity, changing or unfavorable tax treatments and possibly
being issued by companies in heavily regulated
industries.
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Section
1
Fund Summaries |
5 |
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.
Small-
and Mid-Cap Company Risk—Securities
of small-cap companies involve substantial risk. Prices of small-cap securities
may be subject to more abrupt or erratic movements, and to wider fluctuations
and lower liquidity, than security prices of larger, more established companies
or broader market averages in general. It may be difficult to sell small-cap
securities at the desired time and price. While mid-cap securities may be
slightly less volatile than small-cap securities, they still involve similar
risks.
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 12.47% and -12.18%, respectively, for the quarters ended
December 31, 2022 and
June
30, 2022.
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. 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 |
|
Inception
Date |
1
Year |
Since Inception |
NDVG
(return before taxes) |
08/04/21 |
-9.47% |
0.54% |
NDVG
(return after taxes on distributions) |
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-9.76% |
0.21% |
NDVG
(return after taxes on distributions and sale of Fund shares) |
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-5.41% |
0.41% |
S&P
500 Index (reflects no deduction for taxes or sales loads) |
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-18.11% |
-7.82% |
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6 |
Section
1
Fund Summaries |
Management
Investment
Adviser
Nuveen
Fund Advisors, LLC
Sub-Adviser
Nuveen
Asset Management, LLC
Portfolio
Managers
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Name |
Title |
Portfolio
Manager of Fund Since |
David
S. Park, CFA |
Managing
Director |
August,
2021 |
David
A. Chalupnik, CFA |
Senior
Managing Director |
August,
2021 |
Purchase
and Sale of Fund Shares
The
Fund is an actively managed, non-transparent 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
Growth Opportunities ETF
Investment
Objective
The
investment objective of the Fund is to seek long-term capital
appreciation.
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 |
0.55% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.55% |
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 |
$56 |
3
Years |
$176 |
5
Years |
$307 |
10
Years |
$689 |
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
39% of the average value of its
portfolio.
Principal
Investment Strategies
Under
normal market conditions, the Fund seeks to achieve its investment objective by
investing primarily in exchange-traded equity securities of U.S. companies with
market capitalizations of at least $1 billion. The fund is “non-diversified,”
which means that it may invest a significant portion of its assets in a
relatively small number of issuers, which may increase risk. At times and
depending on market conditions, the Fund may also invest a significant
percentage of its assets in a small number of business sectors or industries.
The Fund may also invest up to 20% of its assets in exchange-traded American
Depositary Receipts (“ADRs”)
and common stocks of non-U.S. issuers, including emerging market issuers, that
are listed and trade on a foreign exchange contemporaneously with Fund shares.
Under normal conditions, the portfolio managers will select 40 to 65 stocks for
the Fund’s portfolio. As of the date of this prospectus, the Fund invests a
significant portion of its assets in companies in the information technology
sector.
The
portfolio managers attempt to include securities in the Fund’s portfolio that
exhibit the greatest combination of earnings growth, quality business
fundamentals, and attractive valuation relative to the broader market and peer
group. The portfolio managers ordinarily look for several of the following
characteristics when analyzing companies for potential inclusion within the
Fund: attractive earnings growth, strong cash-flow outlook, a commitment to
research and development, proprietary products and/or services, exposure to
areas with emerging or expanding market share, a well-capitalized balance sheet,
favorable or improving return on invested capital, integrity of the management
team, and attractive relative valuation. In addition to exchange-traded equity
securities (such as common stocks and preferred securities), the Fund may
utilize U.S. listed, exchange-traded futures
contracts.
|
|
8 |
Section
1
Fund Summaries |
Non-Transparent
ETF with Proxy Portfolio Structure. The
Fund is a type of exchange-traded fund (“ETF”).
Unlike traditional ETFs, however, which generally publish their portfolio
holdings on a daily basis, the Fund discloses a portfolio transparency
substitute—the “Proxy
Portfolio”—
and certain related information about the relative performance of the Proxy
Portfolio and the Fund’s actual portfolio (“Actual
Portfolio”)
holdings (the “Proxy
Portfolio Disclosures”),
which are intended to help keep the market price of the Fund’s shares trading at
or close to the underlying net asset value (“NAV”)
per share of the Fund. While the Proxy Portfolio includes some of the Fund’s
holdings, it is not the Fund’s Actual Portfolio, and the Fund will not disclose
the daily holdings of the Actual Portfolio. Although the Fund seeks to benefit
from keeping its portfolio information secret, market participants may attempt
to use the Proxy Portfolio to identify the Fund’s trading strategy, which if
successful, could result in such market participants engaging in certain
predatory trading practices that may have the potential to harm the Fund and its
shareholders. The Fund’s exemptive relief limits the types of securities in
which the Fund can invest, which may constrain the Fund’s ability to implement
its investment strategies. The Fund is actively managed and does not intend to
track an 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. Each risk
summarized below is considered a “principal risk” of investing in the Fund,
regardless of the order in which it appears.
Proxy
Portfolio Structure Risk—Unlike
traditional ETFs that provide daily disclosure of their portfolio holdings, the
Fund does not disclose the daily holdings of the Actual Portfolio. Instead,
the Fund discloses a Proxy Portfolio that is designed to reflect the economic
exposure and risk characteristics of the Fund’s Actual Portfolio on any given
trading day. Although the Proxy Portfolio and Proxy Portfolio Disclosures are
intended to provide Authorized Participants (defined below) and other market
participants with enough information to allow them to engage in effective
arbitrage transactions
that
will keep the market price of the Fund’s shares trading at or close to the
underlying NAV per share of the Fund, while at the same time enabling them to
establish cost-effective hedging strategies to reduce risk, there is a risk that
market prices will vary significantly from the underlying NAV of the Fund. See
“Premium/Discount Risk.” Similarly, shares of the Fund may trade at a wider
bid/ask spread than shares of traditional ETFs, and may therefore be more costly
for investors to trade. See “Trading Issues Risk.” Also, the Fund will incur
expenses to license the Proxy Portfolio mechanism, which may impact shareholder
returns. Additionally, the proxy mechanism itself may result in additional
trading costs, which also may negatively impact shareholder returns. In
addition, although the Proxy Portfolio is designed to protect the Fund from
predatory practices such as front-running and free-riding, market participants
may nevertheless be able to use the Proxy Portfolio and Proxy Portfolio
Disclosures to engage in trading practices that disadvantage the Fund. See
“Predatory Trading Practices Risk.” The Fund will monitor on an ongoing basis
the premium/discount between the market price and the NAV of the Fund’s shares,
but there can be no assurance that the Proxy Portfolio methodology will operate
as intended. The Proxy Portfolio methodology is novel and not yet proven as an
effective arbitrage mechanism. The effectiveness of the Proxy Portfolio
methodology as an arbitrage mechanism is contingent upon, among other things,
the effectiveness of the Fund’s Factor Model analysis in creating a Proxy
Portfolio that performs in a manner substantially identical to the performance
of the Fund’s Actual Portfolio and the willingness of Authorized Participants
and other market participants to trade based on the Proxy Portfolio. In the
event that the Proxy Portfolio methodology does not result in effective
arbitrage opportunities in the Fund shares, the Fund may exhibit wider
premiums/discounts, bid/ask spreads and tracking error. At certain thresholds
for such premiums/discounts, bid/ask spreads and tracking error, the Fund’s
Board of Trustees will consider possible remedial measures, which may include
liquidation or conversion to a fully-transparent, active ETF or a mutual
fund.
· Premium/Discount
Risk—Shares
of the Fund are listed for trading on the NYSE Arca, Inc. (the “NYSE
Arca”)
and are bought and sold in the secondary market at market prices that may
differ from their most recent NAV. The market value of the Fund’s shares will
fluctuate, in some cases materially, in response to changes in the Fund’s
NAV, the intraday value of the Fund’s holdings, and the relative supply and
demand for the Fund’s shares on the exchange. Although the Proxy Portfolio
is intended to provide investors with enough information to allow for an
effective arbitrage mechanism that will keep the market price of the Fund at or
close to the Fund’s NAV, there is a risk (which may increase during periods of
market disruption or volatility) that market prices for Fund shares will vary
significantly from the Fund’s NAV. This risk may be greater for the Fund than
for traditional ETFs that disclose their full portfolio holdings on a daily
basis because the publication of the Proxy Portfolio does not provide the same
level of transparency as the publication of the full portfolio by a fully
transparent active ETF. This could cause the Fund’s shares to have wider bid/ask
spreads and larger premiums/discounts than fully transparent ETFs using the
same investment strategies. Disruptions to creations and redemptions, the
existence of extreme market volatility or potential lack of an active trading
market for shares may result in shares trading at
|
|
Section
1
Fund Summaries |
9 |
a
significant premium or discount to NAV and/or in a reduced liquidity of your
investment. During such periods, you may be unable to sell your shares or may
incur significant losses if you sell your shares. There are various methods by
which investors can purchase and sell shares and various types of orders that
may be placed. Investors should consult their financial intermediary before
purchasing or selling shares of the Fund. If a shareholder purchases shares at a
time when the market price is at a premium to the NAV or sells shares at a time
when the market price is at a discount to the NAV, the shareholder may sustain
losses.
· Authorized
Participant Concentration Risk—Only
certain institutional investors (typically market makers or other
broker-dealers) (“Authorized
Participants”)
may engage in creation or redemption transactions directly with the Fund.
The Fund has a limited number of institutions that act as Authorized
Participants, none of which are or will be obligated to engage in creation
or redemption transactions. To the extent that these institutions exit the
business or are unable to process creation and/or redemption orders with
respect to the Fund and no other Authorized Participant is able to step forward
to create or redeem Creation Units, Fund shares may trade at a discount
to NAV and possibly face trading halts and/or delisting. The Fund’s
novel structure may affect the number of entities willing to act as
Authorized Participants, and this risk may be exacerbated during times of market
stress.
· Predatory
Trading Practices Risk—Although
the Fund seeks to benefit from keeping its portfolio holdings information
secret, market participants may attempt to use the Proxy Portfolio and
related Proxy Portfolio Disclosures to identify the Fund’s holdings and trading
strategy. If successful, this could result in such market participants engaging
in predatory trading practices that could harm the Fund and its shareholders.
The Proxy Portfolio and related Proxy Portfolio Disclosures have been
designed to mitigate the risk that market participants could “reverse engineer”
the Fund’s portfolio and investment strategy, but they may not be
successful in this regard.
· Trading
Issues Risk—Trading
in Fund shares on the NYSE Arca may be halted in certain circumstances. If 10%
or more of the Fund’s Actual Portfolio does not have readily available
market quotations, the Fund will promptly request that the NYSE Arca halt
trading in the Fund’s shares. Such trading halts may have a greater impact
on the Fund compared to other ETFs due to its lack of transparency. If the
trading of a security held in the Fund’s Actual Portfolio is halted or
otherwise does not have readily available market quotations and the sub-adviser
believes that the lack of any such readily available market quotations may
affect the reliability of the Proxy Portfolio as an arbitrage vehicle or
otherwise determines it is in the best interest of the Fund, the
sub-adviser promptly will disclose on the Fund’s website the identity and
weighting of such security for so long as such security’s trading is halted or
otherwise does not have readily available market quotations and remains in
the Actual Portfolio. There can be no assurance that the requirements of the
NYSE Arca necessary to maintain the listing of the Fund will continue to be
met. Because the Fund trades on the basis of a published Proxy Portfolio, it may
trade at a wider bid/ask spread and may experience a wider premium/discount than
traditional ETFs that publish their portfolios on a daily basis, and therefore,
may cost investors more to trade especially during periods of market disruption
or volatility.
· Tracking
Error Risk—Although
the Proxy Portfolio is designed to reflect the economic exposure and risk
characteristics of the Fund’s Actual Portfolio on any given trading day,
there is a risk that the performance of the Proxy Portfolio will diverge from
the performance of the Actual Portfolio, potentially
materially.
Active
Management Risk—The
Fund’s sub-adviser actively manages the Fund’s investments. Consequently, the
Fund is subject to the risk that the investment techniques and risk analyses
employed by the Fund’s sub-adviser may not produce the desired results. This
could cause the Fund to lose value or its investment results to lag relevant
benchmarks or other funds with similar objectives.
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.
|
|
10 |
Section
1
Fund Summaries |
Additionally,
a cybersecurity breach could affect the issuers in which the Fund invests, which
may cause the Fund’s investments to lose
value.
Depositary
Receipt Risk—To
the extent the 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,
including risks associated with fluctuations in currency exchange rates as well
as changes to the economic or political conditions in other countries. ADRs are
depositary receipts issued by a U.S. financial institution that are listed and
trade on a U.S. exchange. ADRs entitle their holder to all dividends and capital
gains paid out on the underlying foreign shares. When the Fund invests in ADRs
rather than investing directly in their underlying foreign shares, the Fund is
exposed to the risk that the ADRs may not provide a return that corresponds
precisely with the return of the underlying foreign
shares.
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 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.
Holders of common stock generally are subject to more risks than holders of
preferred securities because the status of common stockholders upon the
bankruptcy of the issuer is subordinated to that of preferred security
holders.
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.
Futures
Contract Risk—The
use of futures contracts involves additional risks and transaction costs, which
could leave the Fund in a worse position than if it had not used these
instruments. Futures contracts may entail investment exposures that are greater
than their cost would suggest. As a result, a small investment in futures
contracts could have a large impact on
performance.
Growth
Stock Risk—Growth
stocks tend to be more volatile than certain other types of stocks and their
prices usually fluctuate more dramatically than the overall stock market. A
stock with growth characteristics can have sharp price declines due to decreases
in current or expected earnings and may lack dividends that can help cushion its
share price in a declining
market.
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.
Large-Cap
Company Risk—Because
it invests primarily in securities of large-capitalization companies, the Fund
may underperform funds that invest primarily in securities of smaller
capitalization companies during periods when the securities of such companies
are in favor.
|
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Section
1
Fund Summaries |
11 |
Market
Risk—The
market value of the Fund’s investments may go up or down, sometimes rapidly or
unpredictably and for short or extended periods of time, due to the particular
circumstances of individual issuers or due to general conditions impacting
issuers more broadly. Global economies and financial markets have become highly
interconnected, and thus economic, market or political conditions or events in
one country or region might adversely impact the value of the Fund’s investments
whether or not the Fund invests in such country or region. Events such as war,
terrorism, natural and environmental disasters and the spread of infectious
illnesses or other public health emergencies may have a severe negative impact
on the global economy, could cause financial markets to experience extreme
volatility and losses, and could result in the disruption of trading and the
reduction of liquidity in many instruments. Additionally, as inflation
increases, the value of the Fund’s assets can
decline.
Market
Trading Risks—The
Fund is an 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 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. 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.
Non-Diversification
Risk—As a non-diversified
fund, the Fund may invest a larger portion of its assets in the securities of a
limited number of issuers and may be more sensitive to any single economic,
business, political or regulatory occurrence affecting an issuer than a
diversified fund. Poor performance by any one of
these issuers would adversely affect the Fund to a greater extent than a more
broadly diversified
fund.
Preferred
Security Risk—Preferred
securities generally are subordinated to bonds and other debt instruments in a
company’s capital structure and therefore will be subject to greater credit risk
than those debt instruments. In addition, preferred securities are subject to
other risks, such as having no or limited voting rights, being subject to
special redemption rights, having distributions deferred or skipped, having
floating interest rates or dividends, which may result in a decline in value in
a falling interest rate environment, having fixed interest rates or dividends,
which may result in a decline in value in a rising interest rate environment,
having limited liquidity, changing or unfavorable tax treatments and possibly
being issued by companies in heavily regulated
industries.
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.
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12 |
Section
1
Fund Summaries |
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 3.01% and -21.58%, respectively, for the quarters ended
December 31, 2022 and
June
30, 2022.
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. 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 |
Since Inception |
NUGO
(return before taxes) |
09/27/2021 |
-33.06% |
-24.46% |
NUGO
(return after taxes on distributions) |
|
-33.10% |
-24.50% |
NUGO
(return after taxes on distributions and sale of Fund shares) |
|
-19.54% |
-18.47% |
Russell
1000® Growth Index (reflects no deduction for taxes or sales
loads) |
|
-29.14% |
-19.39% |
Management
Investment
Adviser
Nuveen
Fund Advisors, LLC
Sub-Adviser
Nuveen
Asset Management, LLC
Portfolio
Managers
|
|
|
Name |
Title |
Portfolio
Manager of Fund Since |
Karen
Hiatt, CFA |
Managing
Director |
September,
2021 |
Terrence
Kontos, CFA |
Managing
Director |
September,
2021 |
|
|
Section
1
Fund Summaries |
13 |
Purchase
and Sale of Fund Shares
The
Fund is an actively managed, non-transparent 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.
|
|
14 |
Section
1
Fund Summaries |
Nuveen
Small Cap Select ETF
Investment
Objective
The
investment objective of the Fund is capital
appreciation.
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 |
0.85% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.85% |
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 |
$87 |
3
Years |
$271 |
5
Years |
$471 |
10
Years |
$1,049 |
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
64% of the average value of its
portfolio.
Principal
Investment Strategies
Under normal market conditions, the
Fund invests at least 80% of the sum of its net assets in exchange-traded common
stocks of small-capitalization companies. Small-capitalization
companies are defined as companies that have market capitalizations within the
market capitalization range of the companies in the Russell 2000®
Index on the last business day of the month in which its most recent
reconstitution was completed. Reconstitution of the index currently is completed
in June of each year. On June 30, 2022, the range of the index was $25 million
to $10.4 billion.
In
selecting stocks, the Fund’s sub-adviser invests in companies that it believes
meet one or more of the following
criteria:
· Attractively
valued relative to other companies in the same industry or
market.
· Strong
or improving cash flows, revenue and earnings growth, or other
fundamentals.
· An
identifiable catalyst that could increase the value of the company’s stock over
the next one or two years.
The
Fund’s sub-adviser will generally sell a stock if the stock hits its price
target, the company’s fundamentals or competitive position significantly
deteriorate, or if a better alternative exists in the
marketplace.
The
Fund may invest up to 15% of its total assets in non-dollar denominated common
stocks of non-U.S. issuers listed on a foreign exchange that trade on such
exchange contemporaneously with the shares of the Fund (“foreign
common stocks”).
In addition, the Fund may invest up to 25% of its total assets, collectively, in
foreign common stocks and dollar-denominated equity securities of non-U.S.
issuers that are either listed on a U.S. stock exchange or represented by
|
|
Section
1
Fund Summaries |
15 |
exchange-traded
American depositary receipts that are issued by a U.S. financial institution. Up
to 15% of the Fund’s total assets may be invested in the securities of emerging
market issuers.
Non-Transparent
ETF with Proxy Portfolio Structure. The
Fund is a type of exchange-traded fund (“ETF”).
Unlike traditional ETFs, however, which generally publish their portfolio
holdings on a daily basis, the Fund discloses a portfolio transparency
substitute—the “Proxy
Portfolio”—
and certain related information about the relative performance of the Proxy
Portfolio and the Fund’s actual portfolio (“Actual
Portfolio”)
holdings (the “Proxy
Portfolio Disclosures”),
which are intended to help keep the market price of the Fund’s shares trading at
or close to the underlying net asset value (“NAV”)
per share of the Fund. While the Proxy Portfolio includes some of the Fund’s
holdings, it is not the Fund’s Actual Portfolio, and the Fund will not disclose
the daily holdings of the Actual Portfolio. Although the Fund seeks to benefit
from keeping its portfolio information secret, market participants may attempt
to use the Proxy Portfolio to identify the Fund’s trading strategy, which if
successful, could result in such market participants engaging in certain
predatory trading practices that may have the potential to harm the Fund and its
shareholders. The Fund’s exemptive relief limits the types of securities in
which the Fund can invest, which may constrain the Fund’s ability to implement
its investment strategies. The Fund is actively managed and does not intend to
track an 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. Each risk
summarized below is considered a “principal risk” of investing in the Fund,
regardless of the order in which it appears.
Proxy
Portfolio Structure Risk—Unlike
traditional ETFs that provide daily disclosure of their portfolio holdings, the
Fund does not disclose the daily holdings of the Actual Portfolio. Instead,
the Fund discloses a Proxy Portfolio that is designed to reflect the economic
exposure and risk characteristics of the Fund’s Actual Portfolio on any given
trading day. Although the Proxy Portfolio and Proxy Portfolio Disclosures are
intended to provide Authorized Participants (defined below) and other market
participants with enough information to allow them to engage in effective
arbitrage transactions
that
will keep the market price of the Fund’s shares trading at or close to the
underlying NAV per share of the Fund, while at the same time enabling them to
establish cost-effective hedging strategies to reduce risk, there is a risk that
market prices will vary significantly from the underlying NAV of the Fund. See
“Premium/Discount Risk.” Similarly, shares of the Fund may trade at a wider
bid/ask spread than shares of traditional ETFs, and may therefore be more costly
for investors to trade. See “Trading Issues Risk.” Also, the Fund will incur
expenses to license the Proxy Portfolio mechanism, which may impact shareholder
returns. Additionally, the proxy mechanism itself may result in additional
trading costs, which also may negatively impact shareholder returns. In
addition, although the Proxy Portfolio is designed to protect the Fund from
predatory practices such as front-running and free-riding, market participants
may nevertheless be able to use the Proxy Portfolio and Proxy Portfolio
Disclosures to engage in trading practices that disadvantage the Fund. See
“Predatory Trading Practices Risk.” The Fund will monitor on an ongoing basis
the premium/discount between the market price and the NAV of the Fund’s shares,
but there can be no assurance that the Proxy Portfolio methodology will operate
as intended. The Proxy Portfolio methodology is novel and not yet proven as an
effective arbitrage mechanism. The effectiveness of the Proxy Portfolio
methodology as an arbitrage mechanism is contingent upon, among other things,
the effectiveness of the Fund’s Factor Model analysis in creating a Proxy
Portfolio that performs in a manner substantially identical to the performance
of the Fund’s Actual Portfolio and the willingness of Authorized Participants
and other market participants to trade based on the Proxy Portfolio. In the
event that the Proxy Portfolio methodology does not result in effective
arbitrage opportunities in the Fund shares, the Fund may exhibit wider
premiums/discounts, bid/ask spreads and tracking error. At certain thresholds
for such premiums/discounts, bid/ask spreads and tracking error, the Fund’s
Board of Trustees will consider possible remedial measures, which may include
liquidation or conversion to a fully-transparent, active ETF or a mutual
fund.
· Premium/Discount
Risk—Shares
of the Fund are listed for trading on the NYSE Arca, Inc. (the “NYSE
Arca”)
and are bought and sold in the secondary market at market prices that may
differ from their most recent NAV. The market value of the Fund’s shares will
fluctuate, in some cases materially, in response to changes in the Fund’s
NAV, the intraday value of the Fund’s holdings, and the relative supply and
demand for the Fund’s shares on the exchange. Although the Proxy Portfolio
is intended to provide investors with enough information to allow for an
effective arbitrage mechanism that will keep the market price of the Fund at or
close to the Fund’s NAV, there is a risk (which may increase during periods of
market disruption or volatility) that market prices for Fund shares will vary
significantly from the Fund’s NAV. This risk may be greater for the Fund than
for traditional ETFs that disclose their full portfolio holdings on a daily
basis because the publication of the Proxy Portfolio does not provide the same
level of transparency as the publication of the full portfolio by a fully
transparent active ETF. This could cause the Fund’s shares to have wider bid/ask
spreads and larger premiums/discounts than fully
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Section
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Fund Summaries |
transparent
ETFs using the same investment strategies. Disruptions to creations and
redemptions, the existence of extreme market volatility or potential lack of an
active trading market for shares may result in shares trading at a significant
premium or discount to NAV and/or in a reduced liquidity of your investment.
During such periods, you may be unable to sell your shares or may incur
significant losses if you sell your shares. There are various methods by which
investors can purchase and sell shares and various types of orders that may be
placed. Investors should consult their financial intermediary before purchasing
or selling shares of the Fund. If a shareholder purchases shares at a time when
the market price is at a premium to the NAV or sells shares at a time when the
market price is at a discount to the NAV, the shareholder may sustain
losses.
· Authorized
Participant Concentration Risk—Only
certain institutional investors (typically market makers or other
broker-dealers) (“Authorized
Participants”)
may engage in creation or redemption transactions directly with the Fund.
The Fund has a limited number of institutions that act as Authorized
Participants, none of which are or will be obligated to engage in creation
or redemption transactions. To the extent that these institutions exit the
business or are unable to process creation and/or redemption orders with
respect to the Fund and no other Authorized Participant is able to step forward
to create or redeem Creation Units, Fund shares may trade at a discount
to NAV and possibly face trading halts and/or delisting. The Fund’s
novel structure may affect the number of entities willing to act as
Authorized Participants, and this risk may be exacerbated during times of market
stress.
· Predatory
Trading Practices Risk—Although
the Fund seeks to benefit from keeping its portfolio holdings information
secret, market participants may attempt to use the Proxy Portfolio and
related Proxy Portfolio Disclosures to identify the Fund’s holdings and trading
strategy. If successful, this could result in such market participants engaging
in predatory trading practices that could harm the Fund and its shareholders.
The Proxy Portfolio and related Proxy Portfolio Disclosures have been
designed to mitigate the risk that market participants could “reverse engineer”
the Fund’s portfolio and investment strategy, but they may not be
successful in this regard.
· Trading
Issues Risk—Trading
in Fund shares on the NYSE Arca may be halted in certain circumstances. If 10%
or more of the Fund’s Actual Portfolio does not have readily available
market quotations, the Fund will promptly request that the NYSE Arca halt
trading in the Fund’s shares. Such trading halts may have a greater impact
on the Fund compared to other ETFs due to its lack of transparency. If the
trading of a security held in the Fund’s Actual Portfolio is halted or
otherwise does not have readily available market quotations and the sub-adviser
believes that the lack of any such readily available market quotations may
affect the reliability of the Proxy Portfolio as an arbitrage vehicle or
otherwise determines it is in the best interest of the Fund, the
sub-adviser promptly will disclose on the Fund’s website the identity and
weighting of such security for so long as such security’s trading is halted or
otherwise does not have readily available market quotations and remains in
the Actual Portfolio. There can be no assurance that the requirements of the
NYSE Arca necessary to maintain the listing of the Fund will continue to be
met. Because the Fund trades on the basis of a published Proxy Portfolio, it may
trade at a wider bid/ask spread and may experience a wider premium/discount than
traditional ETFs that publish their portfolios on a daily basis, and therefore,
may cost investors more to trade especially during periods of market disruption
or volatility.
· Tracking
Error Risk—Although
the Proxy Portfolio is designed to reflect the economic exposure and risk
characteristics of the Fund’s Actual Portfolio on any given trading day,
there is a risk that the performance of the Proxy Portfolio will diverge from
the performance of the Actual Portfolio, potentially
materially.
Active
Management Risk—The
Fund’s sub-adviser actively manages the Fund’s investments. Consequently, the
Fund is subject to the risk that the investment techniques and risk analyses
employed by the Fund’s sub-adviser may not produce the desired results. This
could cause the Fund to lose value or its investment results to lag relevant
benchmarks or other funds with similar objectives.
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, and derivative
transactions tied to 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
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17 |
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 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.
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.
Market
Risk—The
market value of the Fund’s investments may go up or down, sometimes rapidly or
unpredictably and for short or extended periods of time, due to the particular
circumstances of individual issuers or due to general conditions impacting
issuers more broadly. Global economies and financial markets have become highly
interconnected, and thus economic, market or political conditions or events in
one country or region might adversely impact the value of the Fund’s investments
whether or not the Fund invests in such country or region. Events such as war,
terrorism, natural and environmental disasters and the spread of infectious
illnesses or other public health emergencies may have a severe negative impact
on the global economy, could cause financial markets to experience extreme
volatility and losses, and could result in the disruption of trading and the
reduction of liquidity in many instruments. Additionally, as inflation
increases, the value of the Fund’s assets can
decline.
Market
Trading Risks—The
Fund is an 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 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. 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.
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Section
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Fund Summaries |
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.
Small-Cap
Company Risk—Securities
of small-cap companies involve substantial risk. Prices of small-cap securities
may be subject to more abrupt or erratic movements, and to wider fluctuations
and lower liquidity, than security prices of larger, more established companies
or broader market averages in general. It may be difficult to sell small-cap
securities at the desired time and
price.
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 7.52% and -16.91%, respectively, for the quarters ended
December 31, 2022 and
June
30, 2022.
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. 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 |
Since Inception |
NSCS
(return before taxes) |
08/04/21 |
-19.51% |
-11.58% |
NSCS
(return after taxes on distributions) |
|
-19.58% |
-11.65% |
NSCS
(return after taxes on distributions and sale of Fund shares) |
|
-11.50% |
-8.77% |
Russell
2000® Index (reflects no deduction for taxes or sales
loads) |
|
-20.44% |
-13.36% |
|
|
Section
1
Fund Summaries |
19 |
Management
Investment
Adviser
Nuveen
Fund Advisors, LLC
Sub-Adviser
Nuveen
Asset Management, LLC
Portfolio
Managers
|
|
|
Name |
Title |
Portfolio
Manager of Fund Since |
Gregory
J. Ryan, CFA |
Managing
Director |
August,
2021 |
Jon
A. Loth, CFA |
Managing
Director |
August,
2021 |
Purchase
and Sale of Fund Shares
The
Fund is an actively managed, non-transparent 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
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Fund Summaries |
Nuveen
Winslow Large-Cap Growth ESG ETF
Investment
Objective
The
investment objective of the Fund is to provide long-term capital
appreciation.
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 |
0.64% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00% |
Total
Annual Fund Operating Expenses |
0.64% |
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 |
$65 |
3
Years |
$205 |
5
Years |
$357 |
10
Years |
$798 |
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
58% of the average value of its
portfolio.
Principal
Investment Strategies
The
Fund is actively managed and seeks to achieve its investment objective by
investing, under normal market conditions, primarily in exchange-traded equity
securities of large-cap U.S. companies that exhibit ESG characteristics, as
described below. The Fund’s sub-adviser employs a fundamental, bottom-up
investment process that centers on identifying growth companies which exhibit
some or all of the following characteristics:
· in
an industry with growth potential;
· leads
or gains market share;
· has
identifiable and sustainable competitive advantages;
· is
managed by a team that can perpetuate the company’s competitive advantages;
· high,
and preferably rising, return on invested capital;
· demonstrates
sustainable Environmental, Social and Governance (ESG) characteristics;
· deploys
excess cash flow to enhance shareholder returns; and
· demonstrates
sound corporate governance.
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|
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21 |
In
order to identify investment candidates for the Fund, the sub-adviser begins by
quantitatively screening companies in the Russell 1000®
Index (the “Index’)
as well as certain companies that exhibit similar financial qualities and market
caps but are not otherwise in the Index. The screening process evaluates a
company’s financial performance and certain ESG performance factors
assigned
scores by the sub-adviser based on data provided by independent ESG research
vendors. The companies that pass this screen are then qualitatively assessed in
the context of their respective industries.
As
part of its qualitative assessment, the sub-adviser evaluates each company’s
performance, relative to peers, with respect to ESG factors provided by
independent ESG research vendors. The sub-adviser then determines which ESG
factors may be material to a company’s future financial performance. This
involves an evaluation of how the company integrates particular ESG risks and
opportunities into its corporate strategy through, for example, improving
governance practices, aligning management team incentives, and increasing
transparency into its ESG practices. A potential investment candidate for the
Fund will generally exhibit sustainable practices, as determined by the
sub-adviser, across the following ESG
factors:
· Environmental
- impact on or from climate change, natural resource use and waste management
practices;
· Social
- human capital management, product safety, supply chain management; and
· Governance
- corporate governance, business ethics and advocacy for governmental policy.
The
ESG factor evaluation involves the identification of key performance indicators,
which are given more or less relative weight compared to the broader range of
potential assessment categories. Concerns in one area do not automatically
eliminate a company from being an eligible portfolio investment. When ESG
concerns exist, the sub-adviser gives careful consideration to how companies
address the risks and opportunities they face in the context of their sector or
industry and relative to their peers. The sub-adviser may engage with companies
to encourage them to improve their ESG practices. The sub-adviser’s activities
in this respect may include, but are not limited to, direct dialogue with
company management, electronic communications and letters. The Fund may invest
in companies whose ESG practices are currently suboptimal, with the expectation
that these practices may improve over time either as a result of sub-adviser’s
engagement efforts or through the company’s own
initiatives.
ESG
factors are evaluated by the sub-adviser based on data provided by independent
ESG research vendors, and the sub-adviser favors companies with leadership in
ESG factor performance relative to their peers. As the final step in the
investment process, the sub-adviser determines which companies with potential
for above-average future earnings growth fit its portfolio construction
parameters in light of the companies’ valuations and relative ESG factor
performance.
The
Fund will not invest in companies that the sub-adviser determines are involved
in the following activities:
· manufacturing
of nuclear weapons, cluster munitions, land mines, incendiary devices,
biological or chemical weapons, or depleted uranium munitions;
· civilian
firearms manufacturing;
· tobacco
products manufacturing; or
· thermal
coal mining or production if it accounts for more than 30% of a company’s gross
revenues.
Investing
on the basis of ESG factor evaluation is generally qualitative and subjective by
nature. Not every Fund investment will meet ESG performance indicators, or will
do so at all times, and there can be no assurance that the ESG factor evaluation
or any judgment exercised by the sub-adviser will reflect the beliefs or values
of any particular investor.
The
sub-adviser’s sell discipline utilizes the same fundamental research process in
order to control risk and protect capital. Under normal market conditions, the
sub-adviser employs a sell discipline pursuant to which it may sell some or all
of its position in a stock when a stock becomes fully valued, the fundamental
business prospects are deteriorating, the issuer’s ESG factor performance
declines, or the position exceeds limits set by the
sub-adviser.
The Fund, under normal market
conditions, invests at least 80% of the sum of its net assets in exchange-traded
equity securities of companies with large capitalizations at the time of
purchase. For the purposes of this policy, companies with large
capitalizations are defined as companies with market capitalizations in excess
of $4 billion at the time of purchase. The Fund may invest up to 20% of its net
assets in non-U.S. equity securities listed on a foreign exchange that trade on
such exchange contemporaneously with the shares of the
Fund.
Non-Transparent
ETF with Proxy Portfolio Structure. The
Fund is a type of exchange-traded fund (“ETF”).
Unlike traditional ETFs, however, which generally publish their portfolio
holdings on a daily basis, the Fund discloses a portfolio transparency
substitute—the “Proxy
Portfolio”—
and certain related information about the relative performance of the
|
|
22 |
Section
1
Fund Summaries |
Proxy
Portfolio and the Fund’s actual portfolio (“Actual
Portfolio”)
holdings (the “Proxy
Portfolio Disclosures”),
which are intended to help keep the market price of the Fund’s shares trading at
or close to the underlying net asset value (“NAV”)
per share of the Fund. While the Proxy Portfolio includes some of the Fund’s
holdings, it is not the Fund’s Actual Portfolio, and the Fund will not disclose
the daily holdings of the Actual Portfolio. Although the Fund seeks to benefit
from keeping its portfolio information secret, market participants may attempt
to use the Proxy Portfolio to identify the Fund’s trading strategy, which if
successful, could result in such market participants engaging in certain
predatory trading practices that may have the potential to harm the Fund and its
shareholders. The Fund’s exemptive relief limits the types of securities in
which the Fund can invest, which may constrain the Fund’s ability to implement
its investment strategies. The Fund is actively managed and does not intend to
track an 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. Each risk
summarized below is considered a “principal risk” of investing in the Fund,
regardless of the order in which it appears.
Proxy
Portfolio Structure Risk—Unlike
traditional ETFs that provide daily disclosure of their portfolio holdings, the
Fund does not disclose the daily holdings of the Actual Portfolio. Instead,
the Fund discloses a Proxy Portfolio that is designed to reflect the economic
exposure and risk characteristics of the Fund’s Actual Portfolio on any given
trading day. Although the Proxy Portfolio and Proxy Portfolio Disclosures are
intended to provide Authorized Participants (defined below) and other market
participants with enough information to allow them to engage in effective
arbitrage transactions
that
will keep the market price of the Fund’s shares trading at or close to the
underlying NAV per share of the Fund, while at the same time enabling them to
establish cost-effective hedging strategies to reduce risk, there is a risk that
market prices will vary significantly from the underlying NAV of the Fund. See
“Premium/Discount Risk.” Similarly, shares of the Fund may trade at a wider
bid/ask spread than shares of traditional ETFs, and may therefore be more costly
for investors to trade. See “Trading Issues Risk.” Also, the Fund will incur
expenses to license the Proxy Portfolio mechanism, which may impact shareholder
returns. Additionally, the proxy mechanism itself may result in additional
trading costs, which also may negatively impact shareholder returns. In
addition, although the Proxy Portfolio is designed to protect the Fund from
predatory practices such as front-running and free-riding, market participants
may nevertheless be able to use the Proxy Portfolio and Proxy Portfolio
Disclosures to engage in trading practices that disadvantage the Fund. See
“Predatory Trading Practices Risk.” The Fund will monitor on an ongoing basis
the premium/discount between the market price and the NAV of the Fund’s shares,
but there can be no assurance that the Proxy Portfolio methodology will operate
as intended. The Proxy Portfolio methodology is novel and not yet proven as an
effective arbitrage mechanism. The effectiveness of the Proxy Portfolio
methodology as an arbitrage mechanism is contingent upon, among other things,
the effectiveness of the Fund’s Factor Model analysis in creating a Proxy
Portfolio that performs in a manner substantially identical to the performance
of the Fund’s Actual Portfolio and the willingness of Authorized Participants
and other market participants to trade based on the Proxy Portfolio. In the
event that the Proxy Portfolio methodology does not result in effective
arbitrage opportunities in the Fund shares, the Fund may exhibit wider
premiums/discounts, bid/ask spreads and tracking error. At certain thresholds
for such premiums/discounts, bid/ask spreads and tracking error, the Fund’s
Board of Trustees will consider possible remedial measures, which may include
liquidation or conversion to a fully-transparent, active ETF or a mutual
fund.
· Premium/Discount
Risk—Shares
of the Fund are listed for trading on the NYSE Arca, Inc. (the “NYSE
Arca”)
and are bought and sold in the secondary market at market prices that may
differ from their most recent NAV. The market value of the Fund’s shares will
fluctuate, in some cases materially, in response to changes in the Fund’s
NAV, the intraday value of the Fund’s holdings, and the relative supply and
demand for the Fund’s shares on the exchange. Although the Proxy Portfolio
is intended to provide investors with enough information to allow for an
effective arbitrage mechanism that will keep the market price of the Fund at or
close to the Fund’s NAV, there is a risk (which may increase during periods of
market disruption or volatility) that market prices for Fund shares will vary
significantly from the Fund’s NAV. This risk may be greater for the Fund than
for traditional ETFs that disclose their full portfolio holdings on a daily
basis because the publication of the Proxy Portfolio does not provide the same
level of transparency as the publication of the full portfolio by a fully
transparent active ETF. This could cause the Fund’s shares to have wider bid/ask
spreads and larger premiums/discounts than fully transparent ETFs using the
same investment strategies. Disruptions to creations and redemptions, the
existence of extreme market volatility or potential lack of an active trading
market for shares may result in shares trading at a significant premium or
discount to NAV and/or in a reduced liquidity of your investment. During such
periods, you may be unable to sell your shares or may incur significant losses
if you sell your shares. There are various methods by which investors can
purchase and sell shares and various types of orders that may be placed.
|
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23 |
Investors
should consult their financial intermediary before purchasing or selling shares
of the Fund. If a shareholder purchases shares at a time when the market price
is at a premium to the NAV or sells shares at a time when the market price is at
a discount to the NAV, the shareholder may sustain
losses.
· Authorized
Participant Concentration Risk—Only
certain institutional investors (typically market makers or other
broker-dealers) (“Authorized
Participants”)
may engage in creation or redemption transactions directly with the Fund.
The Fund has a limited number of institutions that act as Authorized
Participants, none of which are or will be obligated to engage in creation
or redemption transactions. To the extent that these institutions exit the
business or are unable to process creation and/or redemption orders with
respect to the Fund and no other Authorized Participant is able to step forward
to create or redeem Creation Units, Fund shares may trade at a discount
to NAV and possibly face trading halts and/or delisting. The Fund’s
novel structure may affect the number of entities willing to act as
Authorized Participants, and this risk may be exacerbated during times of market
stress.
· Predatory
Trading Practices Risk—Although
the Fund seeks to benefit from keeping its portfolio holdings information
secret, market participants may attempt to use the Proxy Portfolio and
related Proxy Portfolio Disclosures to identify the Fund’s holdings and trading
strategy. If successful, this could result in such market participants engaging
in predatory trading practices that could harm the Fund and its shareholders.
The Proxy Portfolio and related Proxy Portfolio Disclosures have been
designed to mitigate the risk that market participants could “reverse engineer”
the Fund’s portfolio and investment strategy, but they may not be
successful in this regard.
· Trading
Issues Risk—Trading
in Fund shares on the NYSE Arca may be halted in certain circumstances. If 10%
or more of the Fund’s Actual Portfolio does not have readily available
market quotations, the Fund will promptly request that the NYSE Arca halt
trading in the Fund’s shares. Such trading halts may have a greater impact
on the Fund compared to other ETFs due to its lack of transparency. If the
trading of a security held in the Fund’s Actual Portfolio is halted or
otherwise does not have readily available market quotations and the sub-adviser
believes that the lack of any such readily available market quotations may
affect the reliability of the Proxy Portfolio as an arbitrage vehicle or
otherwise determines it is in the best interest of the Fund, the
sub-adviser promptly will disclose on the Fund’s website the identity and
weighting of such security for so long as such security’s trading is halted or
otherwise does not have readily available market quotations and remains in
the Actual Portfolio. There can be no assurance that the requirements of the
NYSE Arca necessary to maintain the listing of the Fund will continue to be
met. Because the Fund trades on the basis of a published Proxy Portfolio, it may
trade at a wider bid/ask spread and may experience a wider premium/discount than
traditional ETFs that publish their portfolios on a daily basis, and therefore,
may cost investors more to trade especially during periods of market disruption
or volatility.
· Tracking
Error Risk—Although
the Proxy Portfolio is designed to reflect the economic exposure and risk
characteristics of the Fund’s Actual Portfolio on any given trading day,
there is a risk that the performance of the Proxy Portfolio will diverge from
the performance of the Actual Portfolio, potentially
materially.
Active
Management Risk—The
Fund’s sub-adviser actively manages the Fund’s investments. Consequently, the
Fund is subject to the risk that the investment techniques and risk analyses
employed by the Fund’s sub-adviser may not produce the desired results. This
could cause the Fund to lose value or its investment results to lag relevant
benchmarks or other funds with similar objectives.
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, 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.
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
|
|
24 |
Section
1
Fund Summaries |
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 (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.
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.
Growth
Stock Risk—Growth
stocks tend to be more volatile than certain other types of stocks and their
prices usually fluctuate more dramatically than the overall stock market. A
stock with growth characteristics can have sharp price declines due to decreases
in current or expected earnings and may lack dividends that can help cushion its
share price in a declining
market.
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.
Large-Cap
Company Risk—Because
it invests primarily in securities of large-capitalization companies, the Fund
may underperform funds that invest primarily in securities of smaller
capitalization companies during periods when the securities of such companies
are in favor.
Market
Risk—The
market value of the Fund’s investments may go up or down, sometimes rapidly or
unpredictably and for short or extended periods of time, due to the particular
circumstances of individual issuers or due to general conditions impacting
issuers more broadly. Global economies and financial markets have become highly
interconnected, and thus economic, market or political conditions or events in
one country or region might adversely impact the value of the Fund’s investments
whether or not the Fund invests in such country or region. Events such as war,
terrorism, natural and environmental disasters and the spread of infectious
illnesses or other public health emergencies may have a severe negative impact
on the global economy, could cause financial markets to experience extreme
volatility and losses, and could result in the disruption of trading and the
reduction of liquidity in many instruments. Additionally, as inflation
increases, the value of the Fund’s assets can
decline.
Market
Trading Risks—The
Fund is an 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 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. 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
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Section
1
Fund Summaries |
25 |
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.
Non-Diversification
Risk—As
a non-diversified fund, the Fund may invest a larger portion of its assets in
the securities of a limited number of issuers and may be more sensitive to any
single economic, business, political or regulatory occurrence affecting an
issuer than a diversified fund. Poor
performance by any one of these issuers would adversely affect the Fund to a
greater extent than a more broadly diversified
fund.
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.
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 8.30% and -21.88%, respectively, for the quarters ended
December 31, 2022 and
June
30, 2022.
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. 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 |
Since Inception |
NWLG
(return before taxes) |
08/04/21 |
-31.57% |
-20.40% |
NWLG
(return after taxes on distributions) |
|
-31.57% |
-20.40% |
NWLG
(return after taxes on distributions and sale of Fund shares) |
|
-18.69% |
-15.37% |
Russell
1000® Growth Index (reflects no deduction for taxes or sales
loads) |
|
-29.14% |
-16.98% |
|
|
26 |
Section
1
Fund Summaries |
Management
Investment
Adviser
Nuveen
Fund Advisors, LLC
Sub-Adviser
Winslow
Capital Management, LLC
Portfolio
Managers
|
|
|
Name |
Title |
Portfolio
Manager of Fund Since |
Justin
H. Kelly, CFA |
Chief
Executive Officer, Chief Investment Officer and Portfolio Manager |
August,
2021 |
Patrick
M. Burton, CFA |
Senior
Managing Director and Portfolio Manager |
August,
2021 |
Stephan
C. Petersen |
Managing
Director and Portfolio Manager |
August,
2021 |
|
|
Purchase
and Sale of Fund Shares
The
Fund is an actively managed, non-transparent 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
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27 |
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 an actively-managed, non-transparent ETF and does not intend to track an
index. Unlike traditional ETFs that provide daily disclosure of their portfolio
holdings, these Funds do not disclose the daily holdings of their actual
portfolio. Instead, these Funds disclose a portfolio transparency substitute (a
“Proxy
Portfolio”)
and certain related information about the relative performance of the Proxy
Portfolio and the Fund’s actual portfolio (“Actual
Portfolio”)
holdings (the “Proxy
Portfolio Disclosures”),
which are intended to help keep the market price of the Fund’s shares trading at
or close to the underlying NAV per share of the Fund. While the Proxy
Portfolio includes some of the Fund’s holdings, it is not the Fund’s Actual
Portfolio, and the Fund will not disclose the daily holdings of the Actual
Portfolio. The Funds’ exemptive relief limits the types of securities in
which each Fund can invest, which may constrain a Funds ability to
implement its investment strategies.
|
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.
The
following Funds have each adopted a non-fundamental investment policy (a
“Name
Policy”),
as follows.
· The
Nuveen Dividend Growth ETF, under normal market conditions, invests at least 80%
of the sum of its net assets in dividend-paying exchange-traded equity
securities, which include common stocks and preferred securities. For the
purposes of this policy, dividend-paying equities are defined as equity
securities that have paid a dividend within the trailing twelve months and/or
announced a dividend to be paid in the next twelve months at the time of
purchase.
· The
Nuveen Small Cap Select ETF, under normal market conditions, invests at least
80% of the sum of its net assets in exchange-traded common stocks of
small-capitalization companies. For the purposes of this policy,
small-capitalization companies are defined as companies that have market
capitalizations within the market capitalization range of the companies in the
Russell 2000®
Index on the last business day of the month in which its most recent
reconstitution was completed.
· The
Nuveen Winslow Large-Cap Growth ESG ETF, under normal market conditions, invests
at least 80% of the sum of its net assets in exchange-traded equity securities
of companies with large capitalizations at the time of purchase.
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|
28 |
Section
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Fund Summaries |
For
the purposes of this policy, companies with large capitalizations are defined as
companies with market capitalizations in excess of $4 billion at the time of
purchase.
These
Funds will 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, a Fund will value eligible derivatives at fair value or market
value instead of notional value. As a result of having a Name Policy, each Fund
must provide shareholders with a notice at least 60 days prior to any change of
the Fund’s Name Policy.
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
Fund’s sub-adviser uses, or may use, to achieve the Fund’s objective. The
strategies described below are principal investment strategies unless otherwise
noted. You should be aware that a 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
additional information, call Nuveen Investor Services at (888) 290-9881 or visit
the Fund’s website at www.nuveen.com/etf.
Additional
information about each Fund’s portfolio holdings can be found below.
Equity
Securities
The
Funds invest in exchange-traded equity securities, including common stocks,
preferred securities, real estate investment trusts, and depositary
receipts.
Non-U.S.
Investments
The
Funds may invest in common stocks of non-U.S. issuers that are listed and trade
on a foreign exchange contemporaneously with Fund shares. The Funds will
classify an issuer of a security as being a U.S. or non-U.S. issuer based on the
determination of an unaffiliated, recognized financial data provider. Such
determinations are based on a number of criteria, such as the issuer’s country
of domicile, the primary exchange on which the security trades, the location
from which the majority of the issuer’s revenue comes, and the issuer’s
reporting currency. The Funds’ investment in non-U.S. equity securities may
include direct investment in securities of non-U.S. companies traded overseas on
a foreign exchange contemporaneously with Fund shares as well as ADRs.
The
Nuveen Small Cap Select ETF may invest in issuers located in emerging markets.
Emerging market countries include any country other than Canada, the United
States and the countries comprising the MSCI EAFE®
Index (currently, 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).
Derivatives
As
a non-principal investment strategy, the Nuveen Growth Opportunities ETF may
invest in certain derivatives as part of its principal investment strategy.
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
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|
Section
1
Fund Summaries |
29 |
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 in which the
Fund may invest include exchange-traded futures contracts that trade
contemporaneously with Fund shares.
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 the
Fund’s performance.
Cash
Equivalents and Short-Term Investments
As
a non-principal investment strategy, the Funds may invest in cash and cash
equivalents (short-term U.S. Treasury securities, government money market funds,
and repurchase agreements only) 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, or in
an attempt to respond to adverse market, economic, political or other
conditions. Being invested in these securities may keep a Fund from
participating in a market upswing and prevent a Fund from achieving its
investment objective.
Investment
Companies and Other Pooled Investment Vehicles
As
a non-principal investment strategy, each Fund may invest in securities of other
ETFs that invest primarily in securities of the types in which the Funds may
invest directly. In addition, the Funds may invest a portion of their assets in
pooled investment vehicles (other than investment companies) that invest
primarily in securities of the types in which the Funds may invest directly. 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. Many ETFs, however, may rely on Rule 12d1-4 under the 1940
Act to permit funds to invest in the ETFs’ shares beyond these statutory
limitations, subject to certain conditions and pursuant to a contractual
arrangement between the ETFs and the investing Fund. The Funds may rely on Rule
12d1-4 to invest in ETFs beyond the foregoing statutory limitations. Subject to
certain conditions, a Fund also may invest in money market funds beyond the
statutory limits described above.
Preferred
Securities
The
Nuveen Dividend Growth ETF and Nuveen Growth Opportunities ETF may invest in
exchange-traded preferred securities. Preferred securities, which generally pay
fixed or adjustable rate dividends or interest to investors, have preference
over common stock in the payment of dividends or interest and the liquidation of
a company’s assets, which means that a company typically must pay dividends or
interest on its preferred securities
|
|
30 |
Section
1
Fund Summaries |
before
paying any dividends on its common stock. On the other hand, preferred
securities are junior to most other forms of the company’s debt, including both
senior and subordinated debt. Because of their subordinated position in the
capital structure of an issuer, the ability to defer dividend or interest
payments for extended periods of time without triggering an event of default for
the issuer, and certain other features, preferred securities are often treated
as equity-like instruments by both issuers and investors, as their quality and
value are heavily dependent on the profitability and cash flows of the issuer
rather than on any legal claims to specific assets.
Securities
Lending
The
Funds may lend securities representing up to one-third of the value of its total
assets to broker-dealers, banks, and other institutions to generate additional
income. When a Fund loans its portfolio securities, it will receive, at the
inception of each loan, cash collateral equal to at least 102% of the value of
the loaned securities. Under the Fund’s securities lending agreement, the
securities lending agent will generally bear the risk that a borrower may
default on its obligation to return loaned securities. The Fund, however, will
be responsible for the risks associated with the investment of cash collateral.
The Fund may lose money on its investment of cash collateral or may fail to earn
sufficient income on its investment to meet its obligations to the
borrower.
When
a dividend is paid on a security that is out on loan, the borrower receives the
dividend and in turn makes a payment of the same amount to the Fund. Dividends,
if they constitute “qualified dividends,” are taxable at the same rate as
long-term capital gains. These payments made by borrowers, however, are not
qualified dividends, and are taxable at higher ordinary income rates. As a
result, some of the distributions received by shareholders who hold Fund shares
in taxable accounts may be subject to taxation at a higher rate than if that
Fund had not loaned its portfolio securities.
Temporary
Defensive Positions
In
certain situations or market conditions, 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 a Fund’s portfolio holdings is available in a Fund’s statement of
additional information. A “snapshot” of each Fund’s investments may be found in
its annual and semi-annual reports (when available). In addition, a complete
list of each Fund’s portfolio holdings information is generally made available
on a Fund’s website at www.nuveen.com/etf
ten business days after the end of each month.
These
holdings will remain accessible on the website until a Fund files its Form N-CSR
or Form N-PORT with the SEC for the period that includes the date of the
information. In addition, a list of each Fund’s top 10 holdings as of the end of
each month is generally available approximately two to five business days after
the end of the month on a Fund’s website at www.nuveen.com/etf.
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.
|
|
Section
1
Fund Summaries |
31 |
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
Proxy
Portfolio structure risk:
Unlike traditional ETFs that provide daily disclosure of their portfolio
holdings, the Funds do not disclose the daily holdings of the Actual Portfolio.
Instead, a Fund discloses a Proxy Portfolio that is designed to reflect the
economic exposure and risk characteristics of the Fund’s Actual Portfolio on any
given trading day. Although the Proxy Portfolio and Proxy Portfolio Disclosures
are intended to provide Authorized Participants and other market participants
with enough information to allow them to engage in effective arbitrage
transactions that will keep the market price of a Fund’s shares trading at or
close to the underlying NAV per share of the Fund, while at the same time
enabling them to establish cost-effective hedging strategies to reduce risk,
there is a risk that market prices will vary significantly from the underlying
NAV of the Fund. See “Premium/Discount Risk.” Similarly, shares of the Fund may
trade at a wider bid/ask spread than shares of traditional ETFs, and may
therefore be more costly for investors to trade. See “Trading Issues Risk.”
Also, the Fund will incur expenses to license the Proxy Portfolio mechanism,
which may impact shareholder returns. Additionally, the proxy mechanism itself
may result in additional trading costs, which also may negatively impact
shareholder returns. In addition, although the Proxy Portfolio is designed to
protect a Fund from predatory practices such as front-running and free-riding,
market participants may nevertheless be able to use the Proxy Portfolio and
Proxy Portfolio Disclosures to engage in trading practices that disadvantage the
Fund. See “Predatory Trading Practices Risk.” A Fund will monitor on an ongoing
basis the premium/discount between the market price and the NAV of the Fund’s
shares, but there can be no assurance that the Proxy Portfolio methodology will
operate as intended. The Proxy Portfolio methodology is novel and not yet proven
as an effective arbitrage mechanism. The effectiveness of the Proxy Portfolio
methodology as an arbitrage mechanism is contingent upon, among other things,
the effectiveness of the Fund’s Factor Model analysis in creating a Proxy
Portfolio that performs in a manner substantially identical to the performance
of the Fund’s Actual Portfolio and the willingness of Authorized Participants
and other market participants to trade based on the Proxy Portfolio. In the
event that the Proxy Portfolio methodology does not result in effective
arbitrage opportunities in a Fund’s shares, the Fund may exhibit wider
premiums/discounts, bid/ask spreads and tracking error. At certain thresholds
for such premiums/discounts, bid/ask spreads and tracking error, the Fund’s
Board of Trustees will consider possible remedial measures, which may include
liquidation or conversion to a fully-transparent, active ETF or a mutual
fund.
· Premium/discount
risk: Shares
of the Fund are listed for trading on the NYSE Arca and are bought and sold in
the secondary market at market prices that may differ from their most
recent NAV. The NAV of a Fund’s shares will generally fluctuate with changes in
the market value of the Fund’s holdings. The market value of a Fund’s shares
will fluctuate, in some cases materially, in response to changes in the Fund’s
NAV, the intraday value of the Fund’s holdings, and the relative supply and
demand for the Fund’s shares on the exchange. Although the disclosure of the
Proxy Portfolio and Proxy Portfolio Disclosure is intended to provide investors
with enough information to allow for an effective arbitrage mechanism that will
keep the market price of a Fund at or close to the Fund’s NAV, there is a risk
(which may increase during periods of market disruption or volatility) that
market prices for Fund shares will vary significantly from the Fund’s NAV. This
risk may be greater for a Fund than for traditional ETFs that disclose
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their
full portfolio holdings on a daily basis because publication of the Proxy
Portfolio does not provide the same level of transparency as the publication of
the full portfolio by a fully transparent active ETF. This could cause the
Fund’s shares to have wider bid/ask spreads and larger premiums/discounts than
fully transparent active ETFs using the same investment strategies. The Adviser
and sub-advisers cannot predict whether shares will trade below, at or above
their NAV. Price differences may be due, in large part, to the fact that supply
and demand forces at work in the secondary trading market for shares will be
closely related to, but not identical to, the same forces influencing the prices
of the securities held by the Fund. While the creation/redemption feature is
designed to make it more likely that a Fund’s shares normally will trade on
stock exchanges at prices close to the Fund’s next calculated NAV, exchange
prices are not expected to correlate exactly with the Fund’s NAV due to timing
reasons, supply and demand imbalances and other factors. Disruptions to
creations and redemptions, the existence of extreme market volatility or
potential lack of an active trading market for shares may result in shares
trading at a significant premium or discount to NAV and/or in a reduced
liquidity of your investment. During such periods, you may be unable to sell
your shares or may incur significant losses if you sell your shares. There are
various methods by which investors can purchase and sell shares and various
types of orders that may be placed. Investors should consult their financial
intermediary before purchasing or selling shares of a Fund. If a shareholder
purchases shares at a time when the market price is at a premium to the NAV or
sells shares at a time when the market price is at a discount to the NAV, the
shareholder may sustain losses.
· Authorized
Participant concentration risk: Only
an Authorized Participant may engage in creation or redemption transactions
directly with a Fund. A Fund has a limited number of institutions that act as
Authorized Participants, none of which are or will be obligated to engage
in creation or redemption transactions. To the extent that these institutions
exit the business or are unable to process creation and/or redemption
orders with respect to a Fund and no other Authorized Participant is able to
step forward to create or redeem Creation Units, the Fund’s shares may
trade at a discount to NAV and possibly face trading halts and/or
delisting. The Fund’s novel structure may affect the number of entities
willing to act as Authorized Participants, and this risk may be exacerbated
during times of market stress.
· Predatory
trading practices risk: Although
a Fund seeks to benefit from keeping its portfolio information secret, market
participants may attempt to use the Proxy Portfolio and related Proxy Portfolio
Disclosures to identify the Fund’s holdings and trading strategy. If successful,
this could result in such market participants engaging in predatory trading
practices that could harm a Fund and its shareholders. The Proxy Portfolio and
related Proxy Portfolio Disclosures have been designed to minimize the risk that
market participants could “reverse engineer” a Fund’s portfolio and investment
strategy, but they may not be successful in this regard.
· Trading
issues risk: Although
a Fund’s shares are listed on the NYSE Arca, there can be no assurance that an
active or liquid trading market for them will develop or be maintained. Trading
in Fund shares on the NYSE Arca may be halted due to market conditions or for
reasons that, in the view of the NYSE Arca, make trading in shares inadvisable.
If 10% or more of a Fund’s Actual Portfolio does not have readily available
market quotations, the Fund will promptly request
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that
the NYSE Arca halt trading in the Fund’s shares. Such trading halts
may have a greater impact on the Fund compared to other ETFs due to a
Fund’s lack of transparency. In addition, trading in shares on the NYSE Arca is
subject to trading halts caused by extraordinary market volatility pursuant to
the NYSE Arca’s “circuit breaker” rules (rules that require a halt in trading in
a specific period of time when market prices decline by a specified percentage
during the course of a trading day). If the trading of a security held in the
Fund’s Actual Portfolio is halted or otherwise does not have readily
available market quotations and the sub-adviser believes that the lack of any
such readily available market quotations may affect the reliability of the
Proxy Portfolio as an arbitrage vehicle or otherwise determines it is in the
best interest of the Fund, the sub-adviser promptly will disclose on the
Fund’s website the identity and weighting of such security for so long as such
security’s trading is halted or otherwise does not have readily available
market quotations and remains in the Actual Portfolio. There can be no assurance
that the requirements of the NYSE Arca necessary to maintain the listing of
the Fund will continue to be met or will remain unchanged. In addition, an
exchange or market may close or issue trading halts on specific securities, or
the ability to buy or sell certain securities or financial instruments may be
restricted, which may result in a Fund being unable to buy or sell certain
securities or financial instruments. In such circumstances, the Fund may be
unable to rebalance its portfolio, may be unable to accurately price its
investments and/or may incur substantial trading losses. Because the Funds trade
on the basis of published Proxy Portfolios, they may trade at a wider
bid/ask spread and may experience a wider premium/ discount than traditional
ETFs that publish their portfolios on a daily basis, and therefore, the Funds
may cost investors more to trade especially during periods of market
volatility.
· Tracking
error risk: Although
the Proxy Portfolio is designed to reflect the economic exposure and risk
characteristics of a Fund’s Actual Portfolio on any given trading day,
there is a risk that the performance of the Proxy Portfolio will diverge from
the performance of the Actual Portfolio, potentially materially.
Active
management risk:
A Fund’s sub-adviser actively manages the Fund’s investments. Consequently, each
Fund is subject to the risk that the investment techniques and risk analyses
employed by the Fund’s sub-adviser may not produce the desired results. This
could cause a Fund to lose value or its investment results to lag relevant
benchmarks or other funds with similar objectives. Additionally, legislative,
regulatory or tax developments may affect the investment techniques available to
a Fund’s sub-adviser in connection with managing a Fund and may also adversely
affect the ability of a Fund to achieve its investment goal.
Concentration
risk (Nuveen Small Cap Select ETF only):
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.
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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 derivative transactions tied
to such securities, and hence will affect the NAV of a fund that invests in such
securities. A strong U.S. dollar relative to these other currencies will
adversely affect the value of a fund to the extent it invests in such non-U.S.
securities. Even though the non-U.S. securities held by Nuveen Dividend Growth
Fund are traded in U.S. dollars, their prices are typically indirectly
influenced by currency fluctuations.
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).
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.
Depositary
receipts risk (Nuveen Growth Opportunities ETF only):
To
the extent the 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,
including risks associated with fluctuations in currency exchange rates as well
as changes to the economic or political conditions in other countries. ADRs are
depositary
receipts issued
by a U.S. financial institution that represent a specified number of shares in a
foreign stock and trade on a U.S. national securities exchange. When the Fund
invests in ADRs rather than investing directly in their underlying foreign
shares, the Fund is exposed to the risk that the ADRs may not provide a return
that corresponds precisely with the return of the underlying foreign shares.
Sponsored ADRs are issued with the support of the issuer of the foreign shares
underlying the ADRs and carry all of the rights of common shares, including
voting rights. The holder of an unsponsored ADR 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 ADR. Because the underlying
foreign shares of ADRs are typically denominated or quoted in non-U.S.
currencies, currency exchange rates may affect the value of the Fund’s
portfolio. Further, since an ADR’s underlying shares trade on foreign exchanges
at times when U.S. markets are not open for trading, the value of the ADR’s
underlying shares may change materially at times when U.S. markets are not open
for trading, regardless of whether there is an active U.S. market for Fund
shares.
Dividend-paying
security risk (Nuveen Dividend Growth ETF only):
The Fund’s investment in dividend-paying securities could cause the Fund to
underperform similar funds that invest without consideration of a company’s
track record of paying dividends. Securities of companies with a history of
paying dividends may not participate in a broad market advance to the same
degree as most other securities, and a sharp rise in interest rates or economic
downturn could cause a company to unexpectedly reduce or eliminate
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its
dividend. There is no guarantee that the issuers of the securities held by the
Fund will declare dividends in the future or that, if declared, they will remain
at their current levels or increase over time. The Fund may also be harmed by
changes to the favorable federal income tax treatment generally afforded to
dividends.
Emerging
markets risk (Nuveen Growth Opportunities ETF and Nuveen Small Cap Select ETF
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, a 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.
In addition, the types of securities in which a particular fund invests, such as
value stocks, growth stocks, large-, mid- and/or small-capitalization stocks,
may underperform the market as a whole.
ESG
strategy risk (Nuveen Winslow Large-Cap Growth ESG ETF only):
Because the ETF's ESG investment strategy will exclude securities of certain
issuers for non-financial reasons (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 do not
operate as expected when addressing ESG issues. A company’s ESG performance or
practices could vary over time, which could
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cause
the Fund to be temporarily invested in companies that do not comply with the
Fund’s ESG criteria. There are significant differences in interpretations of
what it means for a company to have positive ESG characteristics. While the
sub-adviser believes its evaluation of ESG characteristics is reasonable, the
decisions the sub-adviser makes may differ with other investors’ or advisers’
views regarding ESG characteristics. Further, in selecting companies for
inclusion in the Fund’s portfolio, the sub-adviser relies on information and ESG
performance data from an affiliated or third-party research provider, which
could be incomplete or erroneous, which in turn could cause the sub-adviser to
assess a company’s ESG characteristics incorrectly. The third-party data
providers may differ in the data they provide for a given security or between
industries, or may only take into account one of many ESG-related components of
a company. Furthermore, data availability and reporting with respect to ESG
criteria may not always be available or may become unreliable. Finally, the
regulatory landscape with respect to ESG investing in the U.S. is still under
development and, as a result, future regulations and/or rules adopted by
applicable regulators could require the Fund to change or adjust its investment
process with respect to ESG investing.
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 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
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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.
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.
Futures
contract risk (Nuveen Growth Opportunities ETF only):
The use of futures contracts involves additional risks and transaction costs,
which could leave a Fund in a worse position than if it had not used these
instruments. Futures contracts may entail investment exposures that are greater
than their cost would suggest. As a result, a small investment in futures
contracts could have a large impact on performance. Additional risks associated
with the use of futures contracts include: the risk of imperfect correlation, or
even no correlation, between the price movements of the futures contracts and
the price movements of the investments being hedged; losses caused by
unanticipated market movements, which are potentially unlimited; the inability
of the Fund’s sub-adviser to correctly predict the direction of securities
prices and other economic factors; and the risk that a Fund may have to sell
securities from its portfolio at a disadvantageous time if it has insufficient
cash to meet margin requirements under the futures contract.
Growth
stock risk (Nuveen Growth Opportunities ETF and Nuveen Winslow Large-Cap Growth
ESG ETF only):
The growth stocks in which each Fund invests tend to be more
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volatile
than certain other types of stocks and their prices usually fluctuate more
dramatically than the overall stock market. Growth stocks may be more expensive
relative to their earnings or assets compared to other types of equity
securities. Accordingly, a stock with growth characteristics can have sharp
price declines due to decreases in current or expected earnings and may lack
dividends that can help cushion its share price in a declining market. In
addition, growth stocks, at times, may not perform as well as value stocks or
the stock market in general, and may be out of favor with investors for varying
periods of time. Growth companies may be newer or smaller companies and may
retain a large part of their earnings for research, development or investments
in capital assets.
Information
technology sector risk (Nuveen Growth Opportunities ETF and Nuveen Winslow
Large-Cap Growth ESG ETF only):
Each 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 and
services, the pace of technological development and product obsolescence, market
competition, government regulation, and patent and intellectual property
rights.
Large-cap
company risk (All Funds except Nuveen Small Cap Select ETF):
While large-cap companies may be less volatile than those of mid-and small-cap
companies, they still involve risk. To the extent a Fund invests in large
capitalization companies, the Fund may underperform funds that invest primarily
in securities of smaller capitalization companies during periods when the
securities of such companies are in favor. Large-capitalization companies may be
unable to respond as quickly as smaller capitalization companies to competitive
challenges or to changes in business, product, financial or other market
conditions.
Market
risk:
The market value of a Fund’s investments may go up or down, sometimes rapidly or
unpredictably and for short or extended periods of time. Market values may
change due to the particular circumstances of individual issuers or due to
general conditions impacting issuers more broadly within a specific country,
region, industry, sector or asset class. Global economies and financial markets
have become highly interconnected, and thus economic, market or political
conditions or events in one country or region might adversely impact issuers in
a different country or region. As a result, the value of a Fund’s investments
may be negatively affected whether or not the Fund invests in a country or
region directly impacted by such conditions or events.
Additionally,
unexpected events and their aftermaths, including broad financial dislocations
(such as the “great recession” of 2008-09), war, armed conflict (such as
Russia’s invasion of Ukraine in February of 2022), terrorism, the imposition of
economic sanctions, natural and environmental disasters and the spread of
infectious illnesses or other public health emergencies (such as the COVID-19
coronavirus pandemic first detected in December of 2019), may adversely affect
the global economy and the markets and issuers in which a Fund invests. These
events could reduce consumer demand or economic output, result in market
closures, travel restrictions or quarantines, or wide-spread unemployment, and
generally have a severe negative impact on the global economy. Such 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. Furthermore, such
events could cause financial markets to experience elevated or even extreme
volatility and losses, and could result in the disruption of trading and the
reduction of liquidity in many instruments. In addition, sanctions and other
measures could limit or
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prevent
a Fund from buying and selling securities (in sanctioned country and other
markets), significantly delay or prevent the settlement of securities
transactions, and significantly impact liquidity and performance. 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 the value of a Fund’s investments. In addition, there is a
possibility that the rising prices of goods and services may have an effect on a
Fund. As inflation increases, the value of a Fund’s assets can
decline.
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.
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 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
|
|
40 |
Section
1
Fund Summaries |
(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.
Non-diversification
risk (Nuveen Growth Opportunities ETF and Nuveen Winslow Large-Cap Growth
ESG ETF only):
Each Fund is a non-diversified fund and may invest a larger portion of its
assets in a fewer number of issuers than a diversified fund. Because a
relatively high percentage of a Fund’s assets may be invested in the securities
of a limited number of issuers, a Fund’s portfolio and, therefore, performance
may be more susceptible to any single economic, business (either globally or
with respect to a particular company or companies), political or regulatory
occurrence affecting an issuer than the portfolio of a diversified fund.
Poor
performance by any one of these issuers would adversely affect a
Fund
to a greater extent than a more broadly diversified fund and each
Fund’s share price may fluctuate more than that of a comparable diversified
fund.
Preferred
security risk (Nuveen Dividend Growth ETF and Nuveen Growth Opportunities ETF
only):
There are special risks associated with investing in exchange-traded preferred
securities:
Limited
voting rights.
Generally, preferred security holders have no voting rights with respect to the
issuing company unless preferred dividends have been in arrears for a specified
number of periods, at which time the preferred security holders may elect a
number of directors to the issuer’s board. Generally, once all the arrearages
have been paid, the preferred security holders no longer have voting
rights.
In
the case of certain preferred securities issued by trusts or special purpose
entities, holders generally have no voting rights except if a declaration of
default occurs and is continuing. In such an event, preferred security holders
generally would have the right to appoint and authorize a trustee to enforce the
Trust’s or special purpose entity’s rights as a creditor under the agreement
with its operating company.
Special
redemption rights.
In certain circumstances, an issuer of preferred securities may redeem the
securities prior to their stated maturity date. For instance, for certain types
of preferred securities, a redemption may be triggered by a change in federal
income tax or securities laws or by regulatory or major corporate action. As
with call provisions, a redemption by the issuer may negatively impact the
return of the security held by a Fund.
Payment
deferral. Generally,
preferred securities may be subject to provisions that allow an issuer, under
certain conditions, to skip (“non-cumulative” preferred securities) or defer
(“cumulative” preferred securities) distributions without any adverse
consequences to the issuer. Non-cumulative preferred securities can skip
distributions indefinitely. Cumulative preferred securities typically contain
provisions that allow an issuer, at its discretion, to defer distributions
payments for up to 10 years. If a Fund owns a preferred security that is
deferring its distribution, the Fund may be required to report income for tax
purposes although it has not yet received such income. In addition, recent
changes in bank
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1
Fund Summaries |
41 |
regulations
may increase the likelihood of issuers deferring or skipping
distributions.
Subordination.
Preferred securities generally are subordinated to bonds and other debt
instruments in a company’s capital structure and therefore are subject to
greater credit risk than those debt instruments.
Floating
Rate Payments.
The dividend or interest rates on preferred securities may be floating, or
convert from fixed to floating at a specified future time. The market value of
floating rate securities may fall in a declining interest rate environment and
may also fall in a rising interest rate environment if there is a lag between
the rise in interest rates and the reset. This risk may also be present with
respect to fixed rate securities that will convert to a floating rate at a
future time. A secondary risk associated with declining interest rates is the
risk that income earned by a Fund on floating rate securities may decline due to
lower coupon payments on the floating-rate securities. Finally, many financial
instruments use or may use a floating rate based upon the London Interbank
Offered Rate, or "LIBOR," which is expected to be phased out. Any potential
effects of the transition away from LIBOR on a Fund or on certain instruments in
which a Fund invests can be difficult to ascertain, and they may vary depending
on factors that include, but are not limited to: (i) existing fallback or
termination provisions in individual contracts and (ii) whether, how, and when
industry participants develop and adopt new reference rates and fallbacks for
both legacy and new products and instruments. In addition, interest rate
provisions included in such contracts may need to be renegotiated in
contemplation of the transition away from LIBOR. The transition may also result
in a reduction in the value of certain instruments held by a Fund or a reduction
in the effectiveness of related Fund transactions such as hedges. In addition,
an instrument’s transition to a replacement rate could result in variations in
the reported yields of a Fund that holds such instrument. The usefulness of
LIBOR as a benchmark could deteriorate during the transition period and, at this
time, it is not possible to predict the effect of the establishment of
replacement rates or any other reforms to LIBOR. Any such effects of the
transition away from LIBOR, as well as other unforeseen effects, could result in
losses to a Fund.
Fixed
Rate Payments.
The market value of preferred securities with fixed dividends or interest rates
may decline in a rising interest rate environment.
Liquidity.
Preferred securities may be substantially less liquid than many other
securities, such as U.S. government securities or common stock. Less liquid
securities involve the risk that the securities will not be able to be sold at
the time desired by a Fund or at prices approximating the values at which the
Fund is carrying the securities on its books.
Financial
services industry.
The preferred securities market is comprised predominately of securities issued
by companies in the financial services industry. Therefore, preferred securities
present substantially increased risks at times of financial turmoil, which could
affect financial services companies more than companies in other sectors and
industries.
Tax
risk.
A Fund may invest in preferred securities or other securities the federal income
tax treatment of which may not be clear or may be subject to recharacterization
by the Internal Revenue Service. It could be more difficult for a Fund to comply
with the tax requirements applicable to regulated investment companies if the
tax characterization of the Fund’s investments or the tax
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|
42 |
Section
1
Fund Summaries |
treatment
of the income from such investments were successfully challenged by the Internal
Revenue Service.
Regulatory
risk.
Issuers of preferred securities may be in industries that are heavily regulated
and that may receive government funding. The value of preferred securities
issued by these companies may be affected by changes in government policy, such
as increased regulation, ownership restrictions, deregulation or reduced
government funding.
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.
Small-
and mid-cap company risk (Nuveen Dividend Growth ETF only):
Securities of small-cap companies involve substantial risk. These companies,
which can include start-up companies offering emerging products or services, may
lack the management expertise, product diversification, and competitive
strengths of larger companies. They may have limited access to financial
resources and may not have the financial strength to sustain them through
business downturns or adverse market conditions. Since small-cap companies
typically reinvest a high proportion of their earnings in their business, they
may not pay dividends for some time, particularly if they are newer companies.
Prices of small-cap securities may be subject to more abrupt or erratic
movements than security prices of larger, more established companies or broader
market averages in general. In addition, the frequency and volume of their
trading may be less than is typical of larger companies, making them subject to
wider price fluctuations and lower liquidity. In some cases, there could be
difficulties in selling the securities of small-cap companies at the desired
time and price, especially in situations of increased market volatility where a
Fund may experience high levels of shareholder redemptions. Securities at the
bottom end of the capitalization range of small-cap companies sometimes are
referred to as “micro-cap” securities. These securities may be subject to
extreme price volatility, as well as limited liquidity and limited research.
While mid-cap securities may be slightly less volatile than small-cap
securities, they still involve similar risks.
Small-cap
company risk (Nuveen Small Cap Select ETF only):
Securities of small-cap companies involve substantial risk. These companies,
which can include start-up companies offering emerging products or services, may
lack the management expertise, financial resources, product diversification, and
competitive strengths of larger companies. They may have limited access to
financial resources and may not have the financial strength to sustain them
through business downturns or adverse market conditions. Since small-cap
companies typically reinvest a high proportion of their earnings in their
business, they may not pay dividends for some time, particularly if they are
newer companies. Prices of small-cap securities may be subject to more abrupt or
erratic movements than security prices of larger, more established companies or
broader market averages in general. In addition, the frequency and volume of
their trading may be less than is typical of larger companies, making them
subject to wider price fluctuations and lower liquidity. In some cases, there
could be difficulties in selling the securities of small-cap companies at the
desired time and price, especially in situations of increased market volatility
where a Fund may experience high levels of shareholder redemptions. Securities
at the bottom end of the capitalization range of small-cap
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Section
1
Fund Summaries |
43 |
companies
sometimes are referred to as “micro-cap” securities. These securities may be
subject to extreme price volatility, as well as limited liquidity and limited
research.
Non-Principal
Risks
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. Major
economic or 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).
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44 |
Section
1
Fund Summaries |
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 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, Nuveen Asset Management, LLC (“Nuveen
Asset Management”
or “NAM”),
located at 333 West Wacker Drive, Chicago, Illinois 60606, to serve as
sub-adviser to the Nuveen Dividend Growth ETF, Nuveen Growth Opportunities ETF
and Nuveen Small Cap Select ETF. Nuveen Asset Management manages the investment
of each Fund’s assets on a discretionary basis, subject to the supervision of
the Adviser. As of December 31, 2022, Nuveen Asset Management managed
approximately $256.8 billion in assets.
The
Adviser has selected its affiliate, Winslow Capital Management, LLC
(“Winslow
Capital”),
located at 4400 IDS Center, 80 South Eighth Street, Minneapolis, Minnesota
55402, to serve as sub-adviser to Nuveen Winslow Large-Cap Growth ESG ETF.
Winslow Capital manages the investment of the Fund’s assets on a discretionary
basis, subject to the supervision of the Adviser. As of December 31, 2022,
Winslow Capital managed approximately $20.6 billion in
assets.
The
Funds are managed by multiple portfolio managers, who are responsible for the
day-to-day management of the Funds, with expertise in the area applicable to the
Funds’ investments. Each portfolio manager may be responsible for different
aspects of a Fund’s management. For example, one manager may be principally
responsible for selecting appropriate investments for a Fund, while another may
be principally responsible for asset allocation. The following is a list of the
portfolio managers primarily responsible for managing each Fund’s investments,
along with their relevant experience. The Funds’ portfolio managers may change
from time to time.
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|
Section
3
Fund Management |
45 |
|
|
|
|
|
|
|
|
Total
Experience (since
dates specified
below) |
Name
& Title
|
Experience
Over Past Five Years |
At
Sub-Adviser* |
Total |
NUVEEN
DIVIDEND GROWTH ETF
|
|
|
David
S. Park, CFA Managing
Director |
Nuveen
Asset Management (equity portfolio management and research) |
2011 |
1998 |
|
|
|
|
David
A. Chalupnik, CFA Senior
Managing Director |
Nuveen
Asset Management and other affiliated investment advisers (equity
portfolio management) |
2002 |
1984 |
|
|
|
|
NUVEEN
GROWTH OPPORTUNITIES ETF
|
|
|
Karen
Hiatt, CFA Managing
Director |
Nuveen
Asset Management (equity portfolio management) (2021-Present), Allianz
Global Investors (1998-2021) |
2021 |
1992 |
|
|
|
|
Terrence
Kontos, CFA Managing
Director |
Nuveen
Asset Management (equity portfolio management) |
2012 |
2005 |
NUVEEN
SMALL CAP SELECT ETF
|
|
|
Gregory
J. Ryan, CFA Managing
Director |
Nuveen
Asset Management (equity portfolio management) |
2011 |
1998 |
|
|
|
|
Jon
A. Loth, CFA Managing
Director |
Nuveen
Asset Management (equity portfolio management) |
2011 |
1994 |
NUVEEN
WINSLOW LARGE-CAP GROWTH ESG ETF
|
|
|
Justin
H. Kelly, CFA CEO/CIO |
Winslow
Capital (equity portfolio management) |
1999 |
1993 |
|
|
|
|
Patrick
M. Burton, CFA Senior
Managing Director |
Winslow
Capital (equity portfolio management) |
2010 |
1995 |
|
|
|
|
Stephan
C. Petersen Managing
Director |
Winslow
Capital (equity portfolio management) |
2013 |
1986 |
*
Including tenure at affiliate or predecessor firms, as applicable.
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.
|
|
46 |
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
Dividend Growth ETF |
0.64% |
Nuveen
Growth Opportunities ETF |
0.55% |
Nuveen
Small Cap Select ETF |
0.85% |
Nuveen
Winslow Large-Cap Growth ESG ETF |
0.64% |
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 |
47 |
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. The Funds have the potential for
wider spreads given their non-transparent structure, especially during periods
of market stress or volatility. Shares of the Funds trade on an exchange at
prices that may differ to varying degrees from the daily NAV of the
shares.
Each
Fund’s primary listing exchange is the NYSE Arca (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.
Proxy
Portfolio Methodology
Unlike
a traditional ETF, a Fund does not disclose its portfolio holdings daily.
Rather, a Fund discloses a portfolio transparency substitute—the “Proxy
Portfolio”—and certain related information about the relative performance of the
Proxy Portfolio and a Fund’s Actual Portfolio holdings, which are designed to
facilitate an effective arbitrage mechanism
for
a Fund’s shares while protecting the identity of a Fund’s full portfolio
holdings. A Fund believes that daily disclosure of its full portfolio holdings
could enable market participants to predict a Fund’s trading strategy and trade
ahead of a Fund’s portfolio trades (a practice known as “front-running”), or to
copy a Fund’s investment strategy (a practice known as “free riding”). The
purpose of the proxy portfolio methodology, as described below (the
“Proxy
Portfolio Methodology”)
is to protect a Fund and its shareholders against such practices. Although a
Fund does not publish its full portfolio holdings daily, the Proxy Portfolio
Methodology is designed to allow Authorized Participants and other market makers
to assess the intraday value and associated risk characteristics of a Fund’s
then-current portfolio holdings (the “Actual
Portfolio”).
An
important feature of the Proxy Portfolio methodology is the daily disclosure of
a basket of cash and securities—the Proxy Portfolio—that is designed and
constructed to closely track the daily performance of a Fund’s Actual Portfolio.
In addition to the Proxy Portfolio, a Fund will disclose daily the
percentage weight overlap between the holdings
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|
48 |
Section
4
Investing in the Funds |
of
the Proxy Portfolio and the Actual Portfolio that formed the basis for a Fund’s
calculation of NAV at the end of the prior Business Day (the “Proxy
Overlap”).
Daily disclosure of the Proxy Portfolio, the Proxy Overlap and the other related
Proxy Portfolio Disclosures is designed to enable Authorized Participants and
other market participants to accurately assess the profitability of arbitrage
trades in shares of a Fund and to effectively hedge their risks associated with
arbitrage and market making activities, thereby helping to ensure that investors
can purchase and sell Fund shares in the secondary market at prices that are at
or close to the underlying NAV per share of a Fund.
Proxy
Portfolio
The
goal of the Proxy Portfolio Methodology is to permit a Fund’s Proxy Portfolio,
during all market conditions, to track closely the daily performance of a Fund’s
Actual Portfolio and to minimize intra-day misalignment between the performance
of the Proxy Portfolio and the performance of the Actual Portfolio. The Proxy
Portfolio is designed to reflect the economic exposures and the risk
characteristics of the Actual Portfolio on any given trading day.
Construction
of a Proxy Portfolio that replicates the daily performance of the Actual
Portfolio is achieved by performing a factor model analysis of a Fund’s Actual
Portfolio. The factor model is comprised of three sets of factors or analytical
metrics: market-based factors, fundamental factors, and industry/sector factors.
Each Fund will have a universe of securities (the “Model
Universe”)
that will be used to generate the Fund’s Proxy Portfolio. The Model Universe
will be comprised of securities that the Fund can purchase and will be a
financial index or stated portfolio of securities from which Fund investments
will be selected. The results of the factor model analysis of a Fund’s Actual
Portfolio are then applied to a Fund’s Model Universe of securities, resulting
in the generation of a Proxy Portfolio, which consists of a subset of the
securities in the Model Universe. The Proxy Portfolio is designed to perform in
a manner substantially identical to the performance of the Actual Portfolio. The
Proxy Portfolio will only include securities and investments in which a Fund may
invest. However, while the Proxy Portfolio and the Actual Portfolio will likely
hold some or many of the same securities, the Proxy Portfolio and a Fund’s
Actual Portfolio will not include identical securities. The Proxy Portfolio will
be reconstituted daily.
Proxy
Portfolio Disclosures
The
composition of the Proxy Portfolio will be published on the Funds’ website at
www.nuveen.com/etf
each Business Day and will include the following information for each
portfolio holding in the Proxy Portfolio: (1) ticker symbol; (2) CUSIP or other
identifier; (3) description of holding; (4) quantity of each security or
other asset held; and (5) percentage weight of the holding in the Proxy
Portfolio. The Funds’ website will publish on a daily basis, per share for each
Fund, the prior Business Day’s NAV and the Closing Price or Bid/Ask Price
(each as defined below), and a calculation of the premium or discount of the
Closing Price or Bid/Ask Price against such NAV. The Funds’ website will
also publish other information metrics regarding the relative behavior of the
Proxy Portfolio and the Actual Portfolio, including the Proxy Overlap
(defined below). Additional information about how the Proxy Portfolio and the
Proxy Overlap are calculated can be found in the SAI and on the Funds’
website at www.nuveen.com/etf.
The website will also include Tracking Error for each Fund and, once a Fund
has completed a fiscal year, the median bid/ask spread (expressed as a
percentage rounded to the nearest hundredth), will be computed by identifying
the Fund’s National Best Bid and Offer as of the end of each ten second
interval during each trading day of the last thirty calendar days, dividing the
difference between each such bid and offer by the midpoint of the
|
|
Section
4
Investing in the Funds |
49 |
National
Best Bid and Offer and identifying the median of these values. Additionally, the
Funds are required to disclose on their website a table showing the number
of days the Funds’ shares traded at a premium or discount and a line graph
showing the Funds’ share premiums or discounts during the most recently
completed calendar year and the most recently completed calendar quarters since
that year (or the life of the Funds).
The
Funds believe that the Proxy Portfolio Disclosures will enable Authorized
Participants and other market makers to use the component securities and
their weightings of the Proxy Portfolio to calculate intraday values that
approximate the value of the securities in the Actual Portfolio and, based
thereon, assess whether the market price of a Fund’s shares is higher or
lower than the approximate contemporaneous value of the Actual Portfolio. These
activities are intended to facilitate an arbitrage mechanism that keeps
market prices of a Fund’s shares at or close to a Fund’s NAV. Moreover, the
Proxy Portfolio Disclosures generated by the Proxy Portfolio methodology
are intended to facilitate effective hedging activities by market makers, so
that share market price bid/ask spreads will be narrow.
Below
are some definitions of the defined terms used above:
· Closing
Price – the official closing price of a Fund’s shares on a Fund’s primary
listing exchange.
· Bid/Ask
Price – the midpoint of the highest bid and the lowest offer based upon the
National Best Bid and Offer as of the time of calculation of a
Fund’s NAV.
· National
Best Bid and Offer – the current national best bid and national best offer as
disseminated by the Consolidated Quotation System or UTP Plan Securities
Information Processor.
· Proxy
Overlap – the percentage weight overlap between the holdings of the prior
Business Day’s Proxy Portfolio compared to the Actual Portfolio’s holdings
that formed the basis for a Fund’s calculation of NAV at the end of the prior
Business Day. The Proxy Overlap is calculated based on the Proxy Portfolio
and portfolio holdings as of the prior Business Day. The Proxy Overlap is
calculated by taking the lesser weight of each asset held in common between
the Actual Portfolio and the Proxy Portfolio and adding the totals. Additional
information about how the Proxy Overlap is calculated can be found on a
Fund’s website at www.nuveen.com/etf.
Each Fund publishes the Proxy Overlap before the opening of Fund share trading
each Business Day.
· Tracking
Error – The standard deviation over the past three months of the
daily proxy spread (i.e.,
the difference, in percentage terms, between the Proxy Portfolio per share NAV
and that of the Actual Portfolio at the end of the trading day). Each Fund
calculates its Tracking Error at the end of each trading day and publishes the
Tracking Error before the opening of Fund share trading each Business
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
|
|
50 |
Section
4
Investing in the Funds |
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. It is
possible that Fund shares will trade with a larger premium/discount because of
its non-transparent structure, and this risk may increase during times of market
stress or volatility.
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”)
(i.e.,
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
names and quantities of the instruments that constitute the basket of securities
in exchange for which a Fund issues or redeems shares will be the same as a
Fund's Proxy Portfolio, except to the extent purchases and redemptions are made
entirely or in part on a cash
|
|
Section
4
Investing in the Funds |
51 |
basis.
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.
|
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.
|
|
52 |
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 |
53 |
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 quarterly for the Nuveen
Dividend Growth ETF and annually for all other ETFs in this prospectus.
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.
|
|
54 |
Section
5
General Information |
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 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.
Corporate
shareholders may be entitled to a dividends-received deduction for the portion
of dividends they receive from a Fund that are attributable to dividends
received by the Fund from U.S. corporations, subject to certain
limitations.
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).
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
|
|
Section
5
General Information |
55 |
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. A Fund may be required to sell certain
securities from its Actual Portfolio, including to the extent the composition of
the Actual Portfolio differs from that of the Proxy Portfolio, prior to
effecting an in-kind redemption to ensure it distributes the proper securities
to Authorized Participants. Any such sales may generate taxable gain or
loss.
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.
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.
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.
|
|
56 |
Section
5
General Information |
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 Funds
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
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.
|
|
Section
5
General Information |
57 |
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
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 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.
|
|
58 |
Section
5
General Information |
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 achieve its investment objective. The Listing Exchange is
not responsible for, nor has it participated 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. 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.
|
Proxy
Portfolio and Proxy Overlap |
Information
regarding the contents of the Proxy Portfolio, and the percentage weight overlap
between the holdings of the Proxy Portfolio and a Fund’s Actual Portfolio
holdings that formed the basis for its calculation of NAV at the end of the
prior Business Day (the “Proxy
Overlap”),
can be found at www.nuveen.com/etf.
|
|
Section
5
General Information |
59 |
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 or, if shorter, for the
period of operations for a Fund. 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
NDVG
2022 |
$26.13 |
$
0.34 |
|
$(1.87 |
) |
$(1.53 |
) |
$(0.33 |
) |
$(0.01 |
) |
$(0.34 |
) |
$24.26 |
$24.27 |
|
2021(d) |
25.00 |
0.09 |
|
1.10 |
|
1.19 |
(0.06 |
) |
- |
|
(0.06 |
) |
26.13 |
26.14 |
|
NUGO
2022 |
26.04 |
0.02 |
|
(8.09 |
) |
(8.07 |
) |
- |
(f) |
- |
|
- |
|
17.97 |
17.93 |
|
2021(g) |
25.00 |
0.01 |
|
1.03 |
|
1.04 |
- |
|
- |
|
- |
|
26.04 |
26.05 |
|
NSCS
2022 |
26.21 |
0.06 |
|
(4.67 |
) |
(4.61 |
) |
(0.03 |
) |
- |
|
(0.03 |
) |
21.57 |
21.57 |
|
2021(d) |
25.00 |
0.01 |
|
1.20 |
|
1.21 |
- |
|
- |
|
- |
|
26.21 |
26.22 |
|
NWLG
2022 |
26.39 |
(0.02 |
) |
(8.37 |
) |
(8.39 |
) |
- |
|
- |
|
- |
|
18.00 |
18.00 |
|
2021(d) |
25.00 |
(0.02 |
) |
1.41 |
|
1.39 |
- |
|
- |
|
- |
|
26.39 |
26.37 |
|
|
|
60 |
Section
6
Financial Highlights |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental
Data |
|
Total
Return |
|
|
Ratios
to Average Net Assets |
|
|
Based on NAV(b) |
Based on Share Price(b) |
Ending Net Assets (000) |
Expenses |
|
Net Investment Income
(Loss) |
Portfolio Turnover Rate(c) |
|
|
|
|
|
|
|
|
|
|
(5.89 |
)% |
(5.91 |
)% |
$7,763 |
0.64 |
% |
1.34 |
% |
12 |
% |
|
4.76 |
|
4.82 |
|
6,009 |
0.64 |
(e) |
1.52 |
(e) |
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(31.01 |
) |
(31.16 |
) |
2,332,827 |
0.55 |
|
0.09 |
|
39 |
|
|
4.18 |
|
4.18 |
|
1,687,423 |
0.55 |
(e) |
0.39 |
(e) |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17.61 |
) |
(17.62 |
) |
5,608 |
0.85 |
|
0.27 |
|
64 |
|
|
4.84 |
|
4.87 |
|
6,290 |
0.85 |
(e) |
0.23 |
(e) |
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(31.77 |
) |
(31.74 |
) |
4,501 |
0.64 |
|
(0.08 |
) |
58 |
|
|
5.56 |
|
5.50 |
|
6,069 |
0.64 |
(e) |
(0.24 |
)(e) |
15 |
|
(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.
(d) For
the period August 4, 2021 (commencement of operations) through October 31, 2021.
(e)
Annualized.
(f)
Value
rounded to zero.
(g) For
the period September 27, 2021 (commencement of operations) through October 31,
2021.
|
|
Section
6
Financial Highlights |
61 |
![[image]](g423833g2img_503ec181a9594.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-Advisers. 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
[email protected]. 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.