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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?
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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
Because the fund has amassed over $10.78 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Blend. MOAT is managed by Van Eck. MOAT, before fees and expenses, 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.46% for MOAT, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.01%.
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.
For MOAT, it has heaviest allocation in the Information Technology sector --about 28.80% of the portfolio --while Industrials and Healthcare round out the top three.
When you look at individual holdings, Kellogg Co (K - Free Report) accounts for about 2.92% of the fund's total assets, followed by Veeva Systems Inc (VEEV - Free Report) and Polaris Inc (PII - Free Report) .
MOAT's top 10 holdings account for about 26.83% of its total assets under management.
Performance and Risk
The ETF has added roughly 23.42% and is up about 20.78% so far this year and in the past one year (as of 08/31/2023), respectively. MOAT has traded between $58.77 and $83.28 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 19.64% 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 $354.34 billion in assets, SPDR S&P 500 ETF has $415.96 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?
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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
Because the fund has amassed over $10.78 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Blend. MOAT is managed by Van Eck. MOAT, before fees and expenses, 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.46% for MOAT, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.01%.
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.
For MOAT, it has heaviest allocation in the Information Technology sector --about 28.80% of the portfolio --while Industrials and Healthcare round out the top three.
When you look at individual holdings, Kellogg Co (K - Free Report) accounts for about 2.92% of the fund's total assets, followed by Veeva Systems Inc (VEEV - Free Report) and Polaris Inc (PII - Free Report) .
MOAT's top 10 holdings account for about 26.83% of its total assets under management.
Performance and Risk
The ETF has added roughly 23.42% and is up about 20.78% so far this year and in the past one year (as of 08/31/2023), respectively. MOAT has traded between $58.77 and $83.28 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 19.64% 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 $354.34 billion in assets, SPDR S&P 500 ETF has $415.96 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.