Nushares ETF Trust
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Exchange-Traded
Funds |
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29
February
2024 |
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Listing
Exchange |
Ticker
Symbol |
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Fund
Name |
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Nuveen
Growth Opportunities ETF |
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NYSE
Arca, Inc. |
NUGO |
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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 Summary
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)
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Management
Fees |
0.55% |
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Distribution
and/or Service (12b-1) Fees |
0.00% |
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Other
Expenses |
0.01% |
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Total
Annual Fund Operating Expenses |
0.56% |
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 |
$57 |
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3
Years |
$179 |
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5
Years |
$313 |
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10
Years |
$701 |
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
31% 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 equity securities (such as common stocks and preferred
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
American Depositary Receipts (“ADRs”)
and common stocks of non-U.S. issuers, including emerging market issuers. 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
Fund is actively managed, and the Fund’s 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.
Principal
Risks
You could lose money by investing in the Fund.
An investment in the Fund is not a deposit
of a bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. The principal risks
of investing in the Fund listed below are presented alphabetically to facilitate
your ability to find particular risks and compare them with the risks of other
funds.Each risk summarized below is considered a “principal risk” of investing
in the Fund, regardless of the order in which it appears.
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, a financial intermediary or the issuers of securities held by the Fund
to suffer a data breach, data corruption or lose operational functionality.
Successful cyber-attacks or other cyber-failures or events affecting the Fund,
its service providers or the issuers of securities held by the Fund 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.
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, as well as armed conflicts, 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, to the extent the rate
of inflation increases, the value of the Fund’s assets may
decline.
Market
Trading Risks—The
Fund is an exchange-traded fund (“ETF”),
and as with all ETFs, Fund shares may be bought and sold in the secondary market
at market prices. Although it is expected that the market price of a Fund share
typically will approximate its net asset value (“NAV”),
there may be times when the market price and the NAV diverge more significantly,
particularly in times of market volatility or steep market declines. Thus, you
may pay more or less than NAV when you buy Fund shares on the secondary market,
and you may receive more or less than NAV when you sell those shares. 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.
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 14.76%
and
-21.58%, respectively, for the quarters ended
December 31, 2023 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 |
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for the Periods
Ended |
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December 31,
2023 |
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Inception
Date |
1
Year |
Since
Inception |
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NUGO
(return before taxes) |
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09/27/21 |
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45.87 |
% |
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1.07 |
% |
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NUGO
(return after taxes on distributions) |
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45.81 |
% |
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1.02 |
% |
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NUGO
(return after taxes on distributions and sale of Fund shares) |
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27.20 |
% |
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0.81 |
% |
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Russell
1000®
Growth Index |
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(reflects
no deduction for taxes or sales loads) |
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42.68 |
% |
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3.79 |
% |
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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 |
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Karen
Hiatt, CFA |
Managing
Director |
September
2021 |
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Terrence
Kontos, CFA |
Managing
Director |
September
2021 |
Purchase
and Sale of Fund Shares
The
Fund is an actively managed 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.
Section
2
Additional Detail About the Fund’s Strategies, Holdings and Risks
This
prospectus contains important information about investing in the Fund. Please
read this prospectus carefully before you make any investment decisions.
Additional information regarding the Fund is available at www.nuveen.com/etf
or by calling Nuveen Investor Services at (888) 290-9881.
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Investment
Objective and Principal
Investment
Strategies |
The
Fund’s investment objective, which is described in the “Fund Summary” section,
may be changed by the Fund’s Board of Trustees (the “Board”)
without shareholder approval.
The
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
Fund’s principal investment strategies are discussed in the “Fund Summary”
section. These are the strategies that the 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. You should
be aware that the 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 the Fund’s portfolio holdings can be found below.
Equity
Securities
The
Fund invests in equity securities. Equity securities generally include common
stocks; preferred securities; warrants to purchase common stocks and preferred
securities; convertible debt securities that are either in the money or
immediately convertible into common stocks or preferred securities; common and
preferred securities issued by master limited partnerships and real estate
investment trusts; depositary receipts; and other securities with equity
characteristics.
Non-U.S.
Investments
The
Fund invests in securities of non-U.S. issuers that are listed and trade on a
foreign exchange. The Fund 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 Fund’s investment in non-U.S.
equity securities may include direct investment in securities of non-U.S.
companies traded overseas as well as American Depositary Receipts (“ADRs”)
and other types of depositary receipts.
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Section
2
Additional Detail About the Fund’s Strategy, Holdings and
Risks |
7 |
The
Fund 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).
Preferred
Securities
The
Fund may invest in 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 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.
Cash
Equivalents and Short-Term Investments
As
a non-principal investment strategy, the Fund may invest in cash and in U.S.
dollar-denominated high-quality money market instruments and other short-term
securities, including money market funds, in such proportions as warranted by
prevailing market conditions and the Fund’s principal investment strategies. The
Fund 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 the Fund from
participating in a market upswing and prevent the Fund from achieving its
investment objective.
Investment
Companies and Other Pooled Investment Vehicles
As
a non-principal investment strategy, the Fund may invest in securities of other
open-end or closed-end investment companies, including ETFs. In addition,
the Fund may invest a portion of its assets in pooled investment vehicles (other
than investment companies) that invest primarily in securities of the types in
which the Fund may invest directly. As a shareholder in an investment company or
other pooled investment vehicle, the 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 the Fund invests in an investment company
or other pooled investment vehicle. In addition, the 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 the Fund acquiring more than 3% of
the voting shares of any other investment company, and a prohibition on
investing more than 5% of the Fund’s total assets in the securities of any one
investment company or more than 10% of its total assets, in the aggregate, in
investment company securities. Subject to certain conditions, the Fund may
invest in money market funds beyond the statutory limits described
above.
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8 |
Section
2
Additional Detail About the Fund’s Strategy, Holdings and
Risks |
Securities
Lending
The
Fund 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 the 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, the 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.
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Disclosure
of Portfolio Holdings |
A
description of the Fund’s policies and procedures with respect to the disclosure
of the Fund’s portfolio holdings is available in the Fund’s statement of
additional information. In addition, the identities and quantities of the
securities held by the Fund are disclosed on the Fund’s website.
Risk
is inherent in all investing. Investing in the Fund 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 Fund. Descriptions of these risks listed below are
presented alphabetically to facilitate your ability to find particular risks and
compare them with the risks of other funds. Each risk summarized below is
considered a “principal risk” of investing in the Fund, regardless of the order
in which it appears. Because of these risks, you should consider an investment
in the Fund to be a long-term investment.
Principal
Risks
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. Additionally, legislative,
regulatory or tax developments may affect the investment techniques available to
the Fund’s sub-adviser in connection with managing the Fund and such
developments, as well as any deficiencies in the operating systems or controls
of the sub-adviser or a Fund service provider, may also adversely affect the
ability of the Fund to achieve its investment goal.
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Section
2
Additional Detail About the Fund’s Strategy, Holdings and
Risks |
9 |
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, and hence will affect the net
asset value of the Fund that invests in such securities. A strong U.S. dollar
relative to these other currencies will adversely affect the value of the Fund
to the extent it invests in such non-U.S. securities.
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 the Fund, the Fund’s investment adviser or sub-adviser, a
financial intermediary, other service providers, or the issuers of securities
held by the Fund to incur regulatory penalties, reputational damage, additional
compliance costs or financial loss. Negative impacts on the 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 the Fund invests, and thereby 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 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.
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.
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. Additionally,
certain emerging markets do not provide information to or cooperate with the
Public Company Accounting Oversight Board or other U.S. regulators. Certain
emerging market countries may also face other significant internal or external
risks, such as the risk of war, macroeconomic,
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geopolitical,
global health conditions, and ethnic, religious and racial conflicts. 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. National policies (including sanctions programs) may
limit the Fund’s investment opportunities including restrictions on investment
in issuers or industries deemed sensitive to national interests.
Equity
security risk:
Equity securities in the Fund’s portfolio may decline significantly in price
over short or extended periods of time. Even a long-term investment approach
cannot guarantee a profit. Price changes may occur in the market as a whole, or
they may occur in only a particular country, company, industry, or sector of the
market. From
time to time, the Fund may invest a significant portion of its assets in
companies in one or more related sectors or industries which would make the Fund
more vulnerable to adverse developments affecting such sectors or industries.
Adverse events in any part of the U.S. and global financial markets may have
unexpected negative effects on equity markets. These events may at times result
in unusually high market volatility, including short-term volatility, which
could negatively affect Fund performance.
A
variety of factors can negatively affect the price of a particular company’s
equity securities. These factors may include, but are not limited to: poor
earnings, a loss of customers, a cut in dividends, certain management decisions,
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 the Fund invests, such as value
stocks, growth stocks, large-, mid- and/or small-capitalization stocks, may
underperform the market as a whole.
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, as well as armed conflicts and 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, the Fund could lose its
entire investment in that particular country.
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. 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:
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· Enforcing
legal rights may be difficult, costly and slow in non-U.S. countries, and there
may be special problems enforcing claims against non-U.S.
governments.
· Non-U.S.
companies may not be subject to accounting, auditing, financial reporting or
recordkeeping standards or governmental supervision comparable to U.S.
companies, and there may be less public information about their
operations.
· Non-U.S.
markets may be less liquid and more volatile and may be more difficult to value
than U.S. markets.
· The
U.S. and non-U.S. markets often rise and fall at different times or by different
amounts due to economic or other developments, including armed conflict or
political, social or diplomatic events, particular to a given country or region.
This phenomenon would tend to lower the overall price volatility of a portfolio
that included both U.S. and non-U.S. securities. Sometimes, however, global
trends will cause the U.S. and non-U.S. markets to move in the same direction,
reducing or eliminating the risk reduction benefit of international
investing.
· Non-U.S.
securities traded on foreign exchanges, particularly in emerging markets
countries, may be subject to further risks due to the inexperience of local
investment professionals and financial institutions, the possibility of
permanent or temporary termination of trading, and greater spreads between bid
and asked prices for securities. In addition, non-U.S. exchanges and investment
professionals are subject to less governmental regulation, and commissions may
be higher than in the United States. Also, there may be delays in the settlement
of non-U.S. exchange transactions.
· The
Fund’s income from non-U.S. issuers may be subject to non-U.S. withholding
taxes. In some countries, the 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 the 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 the 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 the Fund’s liquidity and performance.
To
the extent the 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 the 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,
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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.
Growth
stock risk:
The growth stocks in which the Fund invests tend to be more 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:
The Fund currently invests a significant portion of its assets in the
information technology sector, although this may change over time. Securities of
companies in the information technology sector can be significantly affected by
changes in, among other things, the supply and demand for specific products and
services, the pace of technological development and product obsolescence, market
competition, government regulation, and patent and intellectual property
rights.
Large-cap
company risk:
While large-cap companies may be less volatile than those of mid-and small-cap
companies, they still involve risk. To the extent the 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, consumer tastes or to changes in business, product, financial or
other market conditions. Additionally, large-cap companies are sometimes less
able to achieve as high of growth rates as successful smaller companies,
especially during extended periods of economic expansion.
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. 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 the 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, terrorism, the
imposition of economic sanctions, bank failures (such as the March 2023 failures
of Silicon Valley Bank and Signature Bank, the second- and third-largest bank
failures in U.S. history), 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 the 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
the Fund’s service providers, including the investment
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adviser
and sub-adviser, rely, and could otherwise disrupt the ability of employees of
the Fund’s service providers to perform essential tasks on behalf of the 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 prevent the Fund from buying and
selling securities (in sanctioned countries 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 the Fund’s investments. In addition, there is a possibility
that the rising prices of goods and services may have an effect on the Fund. As
inflation increases, the value of the Fund’s assets can decline.
Market
trading risks:
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. 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.
Only
certain institutional investors are eligible to purchase and redeem shares
directly from the Fund at NAV. In addition, efficient trading in the 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, the Fund’s shares may trade at a
material discount to NAV.
During
periods of high market volatility, a fund 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 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
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 (discussed in further
detail below). 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).
Buying
or selling Fund shares on an exchange involves two types of costs that apply to
all securities transactions. When buying or selling shares of the 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
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pay
for Fund shares (the “bid” price) and the price at which they are willing to
sell Fund shares (the “ask” price). The spread, which varies over time based on
trading volume and market liquidity, is generally narrower if the Fund has more
trading volume and market liquidity and wider if the Fund has less trading
volume and market liquidity (which is often the case for funds that are newly
launched or small in size). The 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 Fund shares, frequent trading may detract
significantly from investment results, and an investment in Fund shares may not
be advisable for investors who anticipate regularly making small investments
through a brokerage account.
Non-diversification
risk:
The 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 the Fund’s assets may be invested in the securities of a limited
number of issuers, the 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 the
Fund
to a greater extent than a more broadly diversified fund and the
Fund’s share price may fluctuate more than that of a comparable diversified
fund.
Preferred
security risk:
There are special risks associated with investing in 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 the 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 the Fund owns a preferred security that is
deferring its distribution, the Fund may be required to report income for tax
purposes although
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it
has not yet received such income. In addition, recent changes in bank
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 the 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 was 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. 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. 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 the 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.
The 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 the Fund to comply with the tax requirements applicable to regulated
investment companies if the tax characterization of the Fund’s investments or
the tax 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.
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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.
Non-Principal
Risks
Derivatives
risk:
The Fund may invest in derivatives as part of its non-principal investment
strategy. The use of derivatives presents risks different from, and
possibly greater than, the risks associated with investing directly in
traditional securities, including leverage risk, market risk, counterparty risk,
liquidity risk, operational risk and legal risk. Operational risk generally
refers to risk related to potential operational issues, including documentation
issues, settlement issues, systems failures, inadequate controls and human
error, and legal risk generally refers to insufficient documentation,
insufficient capacity or authority of counterparty, or legality or
enforceability of a contract.
Derivatives
can be highly volatile, illiquid and difficult to value, and there is the risk
that changes in the value of a derivative held by the Fund will not correlate
with the asset, index or rate underlying the derivative contract. Changes in the
value of a derivative may also create margin delivery or settlement obligations
for the Fund.
The
use of derivatives can lead to losses because of adverse movements in the price
or value of the underlying asset, index or rate, which may be magnified by
certain features of the contract. A derivative transaction also involves the
risk that a loss may be sustained as a result of the failure of the counterparty
to the contract to make required payments. These risks are heightened when the
management team uses derivatives to enhance the Fund’s return or as a substitute
for a position or security, rather than solely to hedge (or offset) the risk of
a position or security held by the Fund.
The
Fund may use derivatives to hedge risk. Hedges are sometimes subject to
imperfect matching between the derivative and the underlying security, and there
can be no assurance that the Fund’s hedging transactions will be effective. The
use of hedging may result in certain adverse tax consequences.
In
addition, when the Fund engages in certain derivative transactions, it is
effectively leveraging its investments, which could result in exaggerated
changes in the NAV of the Fund’s shares and can result in losses that exceed the
amount originally invested. The success of the Fund’s derivatives strategies
will depend on the sub-adviser’s ability to assess and predict the impact of
market or economic developments on the underlying asset, index or rate and the
derivative itself, without the benefit of observing the performance of the
derivative under all possible market conditions.
The
Fund may also enter into over-the-counter (“OTC”)
transactions in derivatives. Transactions in the OTC markets generally are
conducted on a principal-to-principal basis. The terms and conditions of these
instruments generally are not standardized and tend to be more specialized or
complex, and the instruments may be harder to value. In general, there is less
governmental regulation and supervision of transactions in the OTC markets than
of transactions entered into on organized exchanges. In addition, certain
derivative instruments and markets may not be liquid, which means the Fund may
not be able to close out a derivatives transaction in a cost-efficient manner.
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Short
positions in derivatives may involve greater risks than long positions, as the
risk of loss on short positions is theoretically unlimited (unlike a long
position, in which the risk of loss may be limited to the notional amount of the
instrument).
Swap
agreements may involve fees, commissions or other costs that may reduce the
Fund’s gains from a swap agreement or may cause the Fund to lose money.
Futures
contracts are subject to the risk that an exchange may impose price fluctuation
limits, which may make it difficult or impossible for the Fund to close out a
position when desired.
Options
contracts may expire unexercised, which may cause the Fund to realize a capital
loss equal to the premium paid on a purchased option or a capital gain equal to
the premium received on a written option.
Global
economic risk:
National and regional economies and financial markets are becoming increasingly
interconnected, which increases the possibilities that conditions in one
country, region or market might adversely impact issuers in a different country,
region or market. Changes in legal, political, regulatory, tax and economic
conditions may cause fluctuations in markets and securities prices around the
world, which could negatively impact the value of the 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 the 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 the Fund’s service providers, including the
investment adviser and sub-adviser, rely, and could otherwise disrupt the
ability of employees of the Fund’s service providers to perform essential tasks
on behalf of the 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 the
Fund’s investments.
Other
investment companies risk:
When the 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, the Fund is exposed to
the risks to which the other investment companies may be subject. For
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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Section
3
Fund Management
Nuveen
Fund Advisors, LLC (the “Adviser”),
the 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 Fund, oversees the management of the Fund’s portfolio, manages
the 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 the Fund to operate. The Adviser is a wholly
owned subsidiary of Nuveen, LLC (“Nuveen”),
the investment management arm of Teachers Insurance and Annuity Association of
America (“TIAA”).
TIAA is a life insurance company founded in 1918 by the Carnegie Foundation for
the Advancement of Teaching and is the companion organization of College
Retirement Equities Fund (“CREF”).
As of December 31, 2023, Nuveen managed approximately $1.2 trillion in assets,
of which approximately $140.2 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 “Sub-Adviser”),
located at 333 West Wacker Drive, Chicago, Illinois 60606, to serve as
sub-adviser to the Fund. Nuveen Asset Management manages the investment of the
Fund’s assets on a discretionary basis, subject to the supervision of the
Adviser. As of December 31, 2023, Nuveen Asset Management managed approximately
$255.2 billion in assets.
The
Fund is managed by multiple portfolio managers, who are responsible for the
day-to-day management of the Fund, with expertise in the area applicable to the
Fund’s investments. Each portfolio manager may be responsible for different
aspects of the Fund’s management. For example, one manager may be principally
responsible for selecting appropriate investments for the Fund, while another
may be principally responsible for asset allocation. The following is a list of
the portfolio managers primarily responsible for managing the Fund’s
investments, along with their relevant experience. The Fund’s portfolio managers
may change from time to time.
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|
|
|
|
| |
|
|
Total
Experience
(since
dates
specified
below) |
|
Name
& Title
|
Experience
Over Past Five Years |
At
Sub-Adviser* |
Total |
| |
|
|
|
Karen
Hiatt, CFA
Managing
Director |
Nuveen
Asset Management and other advisory affiliates (equity portfolio
management) (2021-Present), Allianz Global Investors (1998-2021) |
2021 |
1992 |
| |
|
|
|
|
Terrence
Kontos, CFA
Managing
Director |
Nuveen
Asset Management and other advisory affiliates (equity portfolio
management) (2012-Present) |
2012 |
2005 |
*
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 Fund is provided in the statement of additional information.
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Section
3
Fund Management |
19 |
As
compensation for the services it provided to the Fund during the fiscal year
ended October 31, 2023, the Adviser received a management fee from the Fund
based on a percentage of the Fund’s average daily net assets, of 0.55%.
The
Adviser is responsible for substantially all other expenses of the 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 Fund’s 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,
2023.
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20 |
Section
3
Fund Management |
Section
4
Investing in the Fund
| |
Purchase
and Sale of Shares |
The
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
Fund through a broker on a national securities exchange, where the Fund’s shares
are listed and trade throughout the day at market prices like shares of other
publicly traded securities. The Fund does not impose any minimum investment for
shares of the Fund purchased on an exchange or otherwise in the secondary
market. The Fund’s shares trade under the trading symbol listed on the cover of
this prospectus.
Purchasing
or selling shares of the Fund on an exchange or other secondary market typically
involves two types of costs. When purchasing or selling shares of the 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 the Fund. The spread will vary
over time based on the Fund’s trading volume and market liquidity.
The
Fund’s primary listing exchange is the NYSE Arca, Inc. (the “Listing
Exchange”).
The Listing Exchange is open for trading Monday through Friday and is closed on
weekends and the following holidays: New Year’s Day, Martin Luther King, Jr.
Day, Presidents’ Day, Good Friday, Memorial Day, Juneteenth Holiday,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Book
Entry
Shares
of the Fund 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 Fund and is
recognized as the owner of all shares for all purposes.
Investors
owning shares of the Fund are beneficial owners as shown on the records of DTC
or its participants. DTC serves as the securities depository for shares of the
Fund. DTC participants include securities brokers and dealers, banks, trust
companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
shares, you are not entitled to receive physical delivery of stock certificates
or to have shares registered in your name, and you are not considered a
registered owner of shares. Therefore, to exercise any right as an owner of
shares, you must rely upon the procedures of DTC and its participants. These
procedures are the same as those that apply to any other securities that you
hold in book-entry or “street name” form.
Share
Trading Prices
The
trading prices of the 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 the
Fund’s shares, which may be more or less than the NAV of such shares.
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Section
4
Investing in the Fund |
21 |
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 Fund. Registered investment companies are permitted to invest in the Fund
beyond the limits set forth in Rule 12d1-4 under the 1940 Act, including that
such investment companies enter into an agreement with the Fund.
| |
Purchase
and Redemption of Creation Units |
Only
certain institutional investors (typically market makers or other
broker-dealers) who have entered into agreements with the Nuveen Securities,
LLC, the Fund’s distributor (the “Distributor”),
(“Authorized
Participants”)
may purchase and redeem shares directly from the Fund 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 the 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
Fund generally issues and redeems 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, the Fund publishes that day’s Basket through
NSCC or another method of public dissemination.
Orders
from Authorized Participants to create or redeem Creation Units may only be
placed on a Business Day and are subject to approval by the Distributor. The
prices at which creations and redemptions occur are based on the next
calculation of NAV after an order is received and deemed acceptable by the
Distributor.
Information
about the procedures regarding creation and redemption of Creation Units
(including the cut-off times for receipt of creation and redemption orders) is
included in the Fund’s statement of additional information.
Nuveen
Securities, LLC, the Fund’s distributor, distributes Creation Units for the Fund
on an agency basis. The Distributor does not maintain a secondary market in
shares of the Fund. The Distributor has no role in determining the policies of
the Fund or the securities that are purchased or sold by the Fund. The
Distributor’s principal address is 333 West Wacker Drive, Chicago, Illinois
60606.
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22 |
Section
4
Investing in the Fund |
| |
Distribution
and Service Payments |
Distribution
and Service Plan
The
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 Fund; 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 the 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 Fund 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 Fund. 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 Fund or other Nuveen
ETFs over another investment. More information regarding these payments is
contained in the Fund’s statement of additional information.
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Section
4
Investing in the Fund |
23 |
The
Fund does not impose any restrictions on the frequency of purchases and
redemptions (“frequent
trading”);
however, the Fund reserves 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 Fund and its shareholders. The Board considered that
the 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 Fund’s shares occurs on the secondary market. Because secondary market
trades do not involve the Fund 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 the Fund’s
trading costs and the realization of capital gains. With respect to purchases
and redemptions by Authorized Participants directly from the Fund 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 the 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 the Fund’s shares trade at or close to NAV. In
addition, the Board recognized that the Fund imposes fixed and variable
transaction fees on purchases and redemptions of Creation Units to cover the
custodial and other costs incurred by the Fund in effecting trades.
| |
|
|
24 |
Section
4
Investing in the Fund |
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. The Fund pays out substantially all of its
net earnings to its shareholders as dividends and distributions.
The Fund
may earn income from its investments in common stocks. These amounts, net of
expenses and taxes (if applicable), are passed along to Fund shareholders as
dividends. Dividends, if any, are declared and paid annually.
The
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. The 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 the Fund’s net
long-term capital gains over its net short-term capital losses) are distributed
to shareholders once a year at year end.
The
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 Fund. Broker-dealers may make
available the DTC book-entry Dividend Reinvestment Service for use by beneficial
owners of the 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 Fund purchased in the secondary market.
As
with any investment, you should consider how your investment in shares of the
Fund 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 Fund, or the tax
consequences of an investment in the Fund. There is no guarantee that shares of
the Fund 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 Fund. 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 Fund makes distributions,
you sell Fund shares, or (for Authorized Participants only) you purchase or
redeem Creation Units.
Taxes
and Tax Reporting
The
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
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Section
5
General Information |
25 |
not
subject to tax at the fund level on income and gains from investments that are
timely distributed to shareholders. However, the 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.
The
Fund intends to make distributions that may be taxed as ordinary income or
capital gains. Distributions of the 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 the 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 the 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 the 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, the 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 the 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 the 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 during the prior year. The tax status of your distributions is
the same whether you reinvest them or elect to receive them in cash.
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26 |
Section
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General Information |
Dividends
and distributions from the Fund 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, the
Fund may be required to sell portfolio securities in order to obtain the cash
needed to distribute redemption proceeds. This may cause the 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,
the 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 the 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. The 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.
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
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Section
5
General Information |
27 |
recognize
a gain or loss equal to the difference between (i) the sum of the market
value of the Creation Units at the time of the exchange and any amount of cash
received by the Authorized Participant in the exchange and (ii) the sum of
the exchanger’s aggregate basis in the securities surrendered and any amount of
cash paid for such Creation Units. An Authorized Participant who redeems
Creation Units will generally recognize a gain or loss equal to the difference
between the exchanger’s basis in the Creation Units and the sum of the aggregate
U.S. dollar market value of the securities plus the amount of any cash received
for such Creation Units. The Internal Revenue Service, however, may assert that
a loss that is realized upon an exchange of securities for Creation Units may
not be currently deducted under the rules governing “wash sales” (for a person
who does not mark-to-market its holdings), or on the basis that there has been
no significant change in economic position.
Gain
or loss recognized by an Authorized Participant upon an issuance of Creation
Units in exchange for securities, or upon a redemption of Creation Units, may be
capital or ordinary gain or loss depending on the circumstances. Any capital
gain or loss realized upon an issuance of Creation Units in exchange for
securities will generally be treated as long-term capital gain or loss if the
securities have been held for more than one year. Any capital gain or loss
realized upon the redemption of a Creation Unit will generally be treated as
long-term capital gain or loss if the Fund shares comprising the Creation Unit
have been held for more than one year. Otherwise, such capital gains or losses
are treated as short-term capital gains or losses.
Persons
exchanging securities for Creation Units should consult their own tax advisors
with respect to the tax treatment of any creation or redemption transaction and
whether the wash sales rules apply and when a loss might be deductible. If you
purchase or redeem Creation Units, you will be sent a confirmation statement
showing how many Fund shares you purchased or redeemed and at what price.
Foreign
Investments by the Fund
Dividends,
interest and other income received by the Fund 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 Fund 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 the 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 the 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 Fund. 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 Fund under all
applicable tax laws.
The
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. The Fund’s NAV per share is calculated by taking the value
of the Fund’s total assets, including
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|
28 |
Section
5
General Information |
interest
or dividends accrued but not yet collected, less all liabilities, and dividing
by the total number of shares outstanding. The 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 Fund’s 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 the 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 Fund’s website at www.nuveen.com/etf.
Brown
Brothers Harriman (“BBH”)
is the administrator, custodian and transfer agent for the Fund.
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Section
5
General Information |
29 |
Shares
of the Fund 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 Fund or any member of the public regarding the ability
of the 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 Fund 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
Fund in connection with the administration, marketing or trading of shares of
the Fund. Without limiting any of the foregoing, in no event shall the Listing
Exchange have any liability for any direct, indirect, special, punitive,
consequential or any other damages (including lost profits) even if notified of
the possibility of such damages.
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Section
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General Information |
Section
6
Financial Highlights
The
financial highlights table is intended to help you understand the Fund’s
financial performance for the period of operations for the 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 the Fund (assuming reinvestment of all dividends and
distributions).
This
has been derived from information that has been audited by KPMG LLP ("KPMG"),
whose report for the most recent fiscal year, along with the Fund’s financial
statements, are included in the Fund’s annual report, which is available upon
request.
Selected
data for a share outstanding throughout the period:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Investment
Operations |
|
|
|
Less
Distributions |
|
|
|
|
Year
Ended
October
31, |
Net
Asset
Value,
Beginning
of
Period |
Net
Investment
Income
(Loss)(a) |
|
Net
Realized/
Unrealized
Gain
(Loss) |
|
Total |
|
From
Net
Investment
Income |
|
From
Net
Realized
Gains |
|
Total |
|
Net
Asset
Value,
End
of
Period |
Ending
Market
Price |
|
|
NUGO
2023 |
$17.97 |
$0.05 |
|
$4.13 |
|
$4.18 |
$(0.05 |
) |
$- |
|
$(0.05 |
) |
$22.10 |
$22.08 |
|
|
2022 |
26.04 |
0.02 |
|
(8.09 |
) |
(8.07 |
) |
- |
(f) |
- |
|
- |
|
17.97 |
17.93 |
|
|
2021(d) |
25.00 |
0.01 |
|
1.03 |
|
1.04 |
- |
|
- |
|
- |
|
26.04 |
26.05 |
|
| |
|
|
Section
6
Financial Highlights |
31 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Ratios/Supplemental
Data |
| |
Total
Return |
|
|
Ratios
to Average Net Assets |
|
| |
Based
on
Net
Asset Value(b) |
Based
on
Market
Price(b) |
Net
Assets,
End
of Period
(000) |
Expenses |
|
Net
Investment
Income
(Loss) |
Portfolio
Turnover
Rate(c) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
23.30 |
% |
23.46 |
% |
$2,476,996 |
0.56 |
% |
0.24 |
% |
31 |
% |
|
| |
(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 |
|
|
(a) Based
on average shares outstanding.
(b) Percentage
is not annualized.
(c) Does
not include in-kind transactions.
(d) For
the period September 27, 2021 (commencement of operations) through October 31,
2021.
(e) Annualized.
(f)
Value rounded to zero.
| |
|
|
32 |
Section
6
Financial Highlights |
![[image]](g670852g3img_1ebbd763e4b64.jpg)
Several
additional sources of information are available to you, including the codes of
ethics adopted by the Fund, Nuveen, the Adviser and the Sub-Adviser. The
statement of additional information, incorporated by reference into this
prospectus, contains detailed information on the policies and operation of the
Fund included in this prospectus. Additional information about the Fund’s
investments will be available in the annual and semi-annual reports to
shareholders. In the Fund’s annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected the
Fund’s performance during its last fiscal year. The Fund’s 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 Fund’s 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 Fund 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 Fund.
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
Fund is a series of Nushares ETF Trust, whose Investment Company Act file number
is 811-23161.
![[image]](g670852g3img_ad97c3dfd8714.jpg)
