Why 'NUGO' Has Gained $200M Every Day

November 12, 2021

It’s the strangest flow chart in the ETF world right now.

Nugo Daily Fund Flows

Courtesy of FactSet

(For a larger view, click on the image above)

 

Approximately $200 million worth of assets has flown into the Nuveen Growth Opportunities ETF (NUGO) every day since mid-October, suggesting that one entity is moving money into the just-launched, thinly traded ETF rather than a messier flow of organic demand into the fund.

The answer is Nuveen’s parent company, TIAA.

In a statement, the Chicago-based Nuveen confirmed it is moving assets within its series of Lifecycle and Lifestyle mutual funds from the $13.7 billion TIAA-CREF Large-Cap Growth Index fund to NUGO.

Filings with the SEC show that every fund in the series of mutual funds expects to replace its allocation to the Large-Cap Index fund to NUGO, with those allocation figures shifting based on the fund’s target date.

“The strategic allocation of TIAA-CREF Lifecycle and Lifestyle funds to NUGO reflects Nuveen’s outlook on areas of opportunity in global equities to improve risk-adjusted returns and enhance retirement outcomes for investors,” said Nuveen ETF Head Jordan Farris in an emailed statement.

It’s not clear just how much in assets is due to be transferred within the target-date funds, or over how long a period of time. A Nuveen spokesperson declined to comment.

While NUGO charges a 37 basis point premium over the index fund it replaces, Nuveen's filing says mutual fund holders will not be charged additional fees as part of the asset reallocation.

Contact Dan Mika at [email protected], and follow him on Twitter

Editor's note: This story previously stated that the shareholders of the target-date mutual funds may be charged additional fees due to NUGO's higher expense ratio. Nuveen is not changing the expense ratio for those funds.

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