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Is VanEck Morningstar Wide Moat ETF (MOAT) a Strong ETF Right Now?
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Making its debut on 04/24/2012, smart beta exchange traded fund VanEck Morningstar Wide Moat ETF (MOAT - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
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
MOAT is managed by Van Eck, and this fund has amassed over $6.60 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the Morningstar Wide Moat Focus Index before fees and expenses.
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 0.46%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.21%.
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.
For MOAT, it has heaviest allocation in the Information Technology sector --about 26.10% of the portfolio --while Industrials and Healthcare round out the top three.
Taking into account individual holdings, Kellogg Co (K - Free Report) accounts for about 3.06% of the fund's total assets, followed by Polaris Inc (PII - Free Report) and Veeva Systems Inc (VEEV - Free Report) .
MOAT's top 10 holdings account for about 27.06% of its total assets under management.
Performance and Risk
Year-to-date, the VanEck Morningstar Wide Moat ETF has lost about -11.22% so far, and is down about -6.33% over the last 12 months (as of 12/06/2022). MOAT has traded between $58.77 and $76.93 in this past 52-week period.
The ETF has a beta of 1.02 and standard deviation of 25.73% for the trailing three-year period, making it a medium risk choice in the space. With about 51 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 $306 billion in assets, SPDR S&P 500 ETF has $372.91 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?
Making its debut on 04/24/2012, smart beta exchange traded fund VanEck Morningstar Wide Moat ETF (MOAT - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
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
MOAT is managed by Van Eck, and this fund has amassed over $6.60 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the Morningstar Wide Moat Focus Index before fees and expenses.
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 0.46%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.21%.
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.
For MOAT, it has heaviest allocation in the Information Technology sector --about 26.10% of the portfolio --while Industrials and Healthcare round out the top three.
Taking into account individual holdings, Kellogg Co (K - Free Report) accounts for about 3.06% of the fund's total assets, followed by Polaris Inc (PII - Free Report) and Veeva Systems Inc (VEEV - Free Report) .
MOAT's top 10 holdings account for about 27.06% of its total assets under management.
Performance and Risk
Year-to-date, the VanEck Morningstar Wide Moat ETF has lost about -11.22% so far, and is down about -6.33% over the last 12 months (as of 12/06/2022). MOAT has traded between $58.77 and $76.93 in this past 52-week period.
The ETF has a beta of 1.02 and standard deviation of 25.73% for the trailing three-year period, making it a medium risk choice in the space. With about 51 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 $306 billion in assets, SPDR S&P 500 ETF has $372.91 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.