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Is VanEck Morningstar International Moat ETF (MOTI) a Strong ETF Right Now?
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A smart beta exchange traded fund, the VanEck Morningstar International Moat ETF (MOTI - Free Report) debuted on 07/13/2015, and offers broad exposure to the World ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Van Eck, MOTI has amassed assets over $243.86 million, making it one of the average sized ETFs in the World ETFs. MOTI seeks to match the performance of the Morningstar Global ex-US Moat Focus Index before fees and expenses.
The Morningstar Global ex-US Moat Focus Index tracks the overall performance of 50 attractively priced companies outside the U.S. with sustainable competitive advantages.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.58% for MOTI, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.05%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, British American Tobacco Plc accounts for about 2.54% of total assets, followed by Millicom International Cellular Sa (TIGO - Free Report) and Imperial Brands Plc (IMB).
MOTI's top 10 holdings account for about 23.58% of its total assets under management.
Performance and Risk
The ETF return is roughly 14.41% so far this year and was up about 24.79% in the last one year (as of 10/07/2024). In the past 52-week period, it has traded between $28.08 and $35.63.
The fund has a beta of 0.80 and standard deviation of 18.12% for the trailing three-year period, which makes MOTI a medium risk choice in this particular space. With about 78 holdings, it effectively diversifies company-specific risk.
Alternatives
VanEck Morningstar International Moat ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $79.64 billion in assets, Vanguard FTSE Developed Markets ETF has $141.95 billion. VXUS has an expense ratio of 0.08% and VEA charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
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 International Moat ETF (MOTI) a Strong ETF Right Now?
A smart beta exchange traded fund, the VanEck Morningstar International Moat ETF (MOTI - Free Report) debuted on 07/13/2015, and offers broad exposure to the World ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Van Eck, MOTI has amassed assets over $243.86 million, making it one of the average sized ETFs in the World ETFs. MOTI seeks to match the performance of the Morningstar Global ex-US Moat Focus Index before fees and expenses.
The Morningstar Global ex-US Moat Focus Index tracks the overall performance of 50 attractively priced companies outside the U.S. with sustainable competitive advantages.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.58% for MOTI, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.05%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, British American Tobacco Plc accounts for about 2.54% of total assets, followed by Millicom International Cellular Sa (TIGO - Free Report) and Imperial Brands Plc (IMB).
MOTI's top 10 holdings account for about 23.58% of its total assets under management.
Performance and Risk
The ETF return is roughly 14.41% so far this year and was up about 24.79% in the last one year (as of 10/07/2024). In the past 52-week period, it has traded between $28.08 and $35.63.
The fund has a beta of 0.80 and standard deviation of 18.12% for the trailing three-year period, which makes MOTI a medium risk choice in this particular space. With about 78 holdings, it effectively diversifies company-specific risk.
Alternatives
VanEck Morningstar International Moat ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $79.64 billion in assets, Vanguard FTSE Developed Markets ETF has $141.95 billion. VXUS has an expense ratio of 0.08% and VEA charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
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.