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Is VanEck Morningstar Wide Moat ETF (MOAT) a Strong ETF Right Now?
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A smart beta exchange traded fund, the VanEck Morningstar Wide Moat ETF (MOAT - Free Report) debuted on 04/24/2012, and offers broad exposure to the Style Box - Large Cap Blend 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $13.23 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Blend. MOAT is managed by Van Eck. 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.46%.
It's 12-month trailing dividend yield comes in at 0.86%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 22.70% of the portfolio. Financials and Healthcare round out the top three.
When you look at individual holdings, Domino's Pizza Inc (DPZ - Free Report) accounts for about 2.94% of the fund's total assets, followed by Transunion (TRU - Free Report) and Alphabet Inc (GOOGL - Free Report) .
Its top 10 holdings account for approximately 27.04% of MOAT's total assets under management.
Performance and Risk
So far this year, MOAT has lost about -0.28%, and is up roughly 31.50% in the last one year (as of 01/03/2024). During this past 52-week period, the fund has traded between $65.24 and $85.30.
The fund has a beta of 1.05 and standard deviation of 19.28% for the trailing three-year period, which makes MOAT a medium risk choice in this particular space. With about 55 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 $397.26 billion in assets, SPDR S&P 500 ETF has $490.48 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?
A smart beta exchange traded fund, the VanEck Morningstar Wide Moat ETF (MOAT - Free Report) debuted on 04/24/2012, and offers broad exposure to the Style Box - Large Cap Blend 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $13.23 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Blend. MOAT is managed by Van Eck. 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.46%.
It's 12-month trailing dividend yield comes in at 0.86%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 22.70% of the portfolio. Financials and Healthcare round out the top three.
When you look at individual holdings, Domino's Pizza Inc (DPZ - Free Report) accounts for about 2.94% of the fund's total assets, followed by Transunion (TRU - Free Report) and Alphabet Inc (GOOGL - Free Report) .
Its top 10 holdings account for approximately 27.04% of MOAT's total assets under management.
Performance and Risk
So far this year, MOAT has lost about -0.28%, and is up roughly 31.50% in the last one year (as of 01/03/2024). During this past 52-week period, the fund has traded between $65.24 and $85.30.
The fund has a beta of 1.05 and standard deviation of 19.28% for the trailing three-year period, which makes MOAT a medium risk choice in this particular space. With about 55 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 $397.26 billion in assets, SPDR S&P 500 ETF has $490.48 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.