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Is VanEck Morningstar SMID Moat ETF (SMOT) a Strong ETF Right Now?
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Making its debut on 10/04/2022, smart beta exchange traded fund VanEck Morningstar SMID Moat ETF (SMOT - Free Report) provides investors broad exposure to the Style Box - All 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
Managed by Van Eck, SMOT has amassed assets over $244.28 million, making it one of the average sized ETFs in the Style Box - All Cap Blend. Before fees and expenses, SMOT seeks to match the performance of the MORNINGSTAR US SML-MID CAP MOAT FOCUS ID.
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
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 0.49% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.66%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 24.20% 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
Year-to-date, the VanEck Morningstar SMID Moat ETF has lost about -1.59% so far, and was up about 4.79% over the last 12 months (as of 01/29/2024). SMOT has traded between $25.84 and $31.70 in this past 52-week period.
The fund has a beta of 1.32 and standard deviation of 19.35% 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 $50.49 billion in assets, Vanguard Total Stock Market ETF has $355.10 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.
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Is VanEck Morningstar SMID Moat ETF (SMOT) a Strong ETF Right Now?
Making its debut on 10/04/2022, smart beta exchange traded fund VanEck Morningstar SMID Moat ETF (SMOT - Free Report) provides investors broad exposure to the Style Box - All 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
Managed by Van Eck, SMOT has amassed assets over $244.28 million, making it one of the average sized ETFs in the Style Box - All Cap Blend. Before fees and expenses, SMOT seeks to match the performance of the MORNINGSTAR US SML-MID CAP MOAT FOCUS ID.
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
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 0.49% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.66%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Discretionary sector - about 24.20% 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
Year-to-date, the VanEck Morningstar SMID Moat ETF has lost about -1.59% so far, and was up about 4.79% over the last 12 months (as of 01/29/2024). SMOT has traded between $25.84 and $31.70 in this past 52-week period.
The fund has a beta of 1.32 and standard deviation of 19.35% 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 $50.49 billion in assets, Vanguard Total Stock Market ETF has $355.10 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.