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Is VanEck Morningstar Wide Moat ETF (MOAT) a Strong ETF Right Now?
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The VanEck Morningstar Wide Moat ETF (MOAT - Free Report) made its debut on 04/24/2012, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Van Eck, MOAT has amassed assets over $15.59 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Morningstar Wide Moat Focus Index.
The Morningstar Wide Moat Focus Index tracks the overall performance of the 20 most attractively priced companies with sustainable competitive advantages.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for MOAT are 0.47%, which makes it on par with most peer products in the space.
MOAT's 12-month trailing dividend yield is 0.78%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 22.20% of the portfolio, the fund has heaviest allocation to the Industrials sector; Healthcare and Information Technology round out the top three.
When you look at individual holdings, Rtx Corp (RTX - Free Report) accounts for about 2.88% of the fund's total assets, followed by Altria Group Inc (MO - Free Report) and Campbell Soup Co (CPB - Free Report) .
The top 10 holdings account for about 27.25% of total assets under management.
Performance and Risk
The ETF return is roughly 10.70% and it's up approximately 19.57% so far this year and in the past one year (as of 09/10/2024), respectively. MOAT has traded between $70.71 and $95.32 during this last 52-week period.
The fund has a beta of 1.02 and standard deviation of 19.23% for the trailing three-year period, which makes MOAT a medium risk choice in this particular space. With about 56 holdings, it effectively diversifies company-specific risk.
Alternatives
VanEck Morningstar Wide Moat ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $506.52 billion in assets, SPDR S&P 500 ETF has $547.40 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is VanEck Morningstar Wide Moat ETF (MOAT) a Strong ETF Right Now?
The VanEck Morningstar Wide Moat ETF (MOAT - Free Report) made its debut on 04/24/2012, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Van Eck, MOAT has amassed assets over $15.59 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Morningstar Wide Moat Focus Index.
The Morningstar Wide Moat Focus Index tracks the overall performance of the 20 most attractively priced companies with sustainable competitive advantages.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for MOAT are 0.47%, which makes it on par with most peer products in the space.
MOAT's 12-month trailing dividend yield is 0.78%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 22.20% of the portfolio, the fund has heaviest allocation to the Industrials sector; Healthcare and Information Technology round out the top three.
When you look at individual holdings, Rtx Corp (RTX - Free Report) accounts for about 2.88% of the fund's total assets, followed by Altria Group Inc (MO - Free Report) and Campbell Soup Co (CPB - Free Report) .
The top 10 holdings account for about 27.25% of total assets under management.
Performance and Risk
The ETF return is roughly 10.70% and it's up approximately 19.57% so far this year and in the past one year (as of 09/10/2024), respectively. MOAT has traded between $70.71 and $95.32 during this last 52-week period.
The fund has a beta of 1.02 and standard deviation of 19.23% for the trailing three-year period, which makes MOAT a medium risk choice in this particular space. With about 56 holdings, it effectively diversifies company-specific risk.
Alternatives
VanEck Morningstar Wide Moat ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $506.52 billion in assets, SPDR S&P 500 ETF has $547.40 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.