We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is VanEck Morningstar SMID Moat ETF (SMOT) a Strong ETF Right Now?
Read MoreHide Full Article
Designed to provide broad exposure to the Style Box - All Cap Blend category of the market, the VanEck Morningstar SMID Moat ETF (SMOT - Free Report) is a smart beta exchange traded fund launched on 10/04/2022.
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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
SMOT is managed by Van Eck, and this fund has amassed over $335.98 million, which makes it one of the average sized ETFs in the Style Box - All Cap Blend. This particular fund seeks to match the performance of the MORNINGSTAR US SML-MID CAP MOAT FOCUS ID before fees and expenses.
The Morningstar US Small-Mid Cap Moat Focus Index tracks the overall performance of small and mid-cap companies with sustainable competitive advantages and attractive valuations.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.49% for SMOT, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.60%.
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 Consumer Discretionary sector - about 25.20% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Expedia Group Inc (EXPE - Free Report) accounts for about 1.49% of total assets, followed by Capital One Financial Corp (COF - Free Report) and Brunswick Corp/de (BC - Free Report) .
The top 10 holdings account for about 14.34% of total assets under management.
Performance and Risk
The ETF has added roughly 8.29% and it's up approximately 23.55% so far this year and in the past one year (as of 04/01/2024), respectively. SMOT has traded between $25.84 and $34.11 during this last 52-week period.
The fund has a beta of 1.33 and standard deviation of 18.84% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
VanEck Morningstar SMID Moat ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P Total U.S. Stock Market ETF (ITOT - Free Report) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI - Free Report) tracks CRSP US Total Market Index. IShares Core S&P Total U.S. Stock Market ETF has $54.23 billion in assets, Vanguard Total Stock Market ETF has $386.93 billion. ITOT has an expense ratio of 0.03% and VTI charges 0.03%.
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 - All 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is VanEck Morningstar SMID Moat ETF (SMOT) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - All Cap Blend category of the market, the VanEck Morningstar SMID Moat ETF (SMOT - Free Report) is a smart beta exchange traded fund launched on 10/04/2022.
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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
SMOT is managed by Van Eck, and this fund has amassed over $335.98 million, which makes it one of the average sized ETFs in the Style Box - All Cap Blend. This particular fund seeks to match the performance of the MORNINGSTAR US SML-MID CAP MOAT FOCUS ID before fees and expenses.
The Morningstar US Small-Mid Cap Moat Focus Index tracks the overall performance of small and mid-cap companies with sustainable competitive advantages and attractive valuations.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.49% for SMOT, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.60%.
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 Consumer Discretionary sector - about 25.20% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Expedia Group Inc (EXPE - Free Report) accounts for about 1.49% of total assets, followed by Capital One Financial Corp (COF - Free Report) and Brunswick Corp/de (BC - Free Report) .
The top 10 holdings account for about 14.34% of total assets under management.
Performance and Risk
The ETF has added roughly 8.29% and it's up approximately 23.55% so far this year and in the past one year (as of 04/01/2024), respectively. SMOT has traded between $25.84 and $34.11 during this last 52-week period.
The fund has a beta of 1.33 and standard deviation of 18.84% for the trailing three-year period. With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
VanEck Morningstar SMID Moat ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P Total U.S. Stock Market ETF (ITOT - Free Report) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI - Free Report) tracks CRSP US Total Market Index. IShares Core S&P Total U.S. Stock Market ETF has $54.23 billion in assets, Vanguard Total Stock Market ETF has $386.93 billion. ITOT has an expense ratio of 0.03% and VTI charges 0.03%.
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 - All 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.