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Is VanEck Morningstar SMID Moat ETF (SMOT) a Strong ETF Right Now?
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A smart beta exchange traded fund, the VanEck Morningstar SMID Moat ETF (SMOT - Free Report) debuted on 10/04/2022, and offers broad exposure to the Style Box - All 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is sponsored by Van Eck. It has amassed assets over $382 million, making 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
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.
Operating expenses on an annual basis are 0.49% for SMOT, making it on par with most peer products in the space.
SMOT's 12-month trailing dividend yield is 1.19%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For SMOT, it has heaviest allocation in the Consumer Discretionary sector --about 21.6% of the portfolio --while Industrials and Healthcare round out the top three.
Looking at individual holdings, Corteva Inc (CTVA) accounts for about 1.67% of total assets, followed by Veeva Systems Inc (VEEV) and Lpl Financial Holdings Inc (LPLA).
The top 10 holdings account for about 15.33% of total assets under management.
Performance and Risk
Year-to-date, the VanEck Morningstar SMID Moat ETF has lost about -0.7% so far, and is up about 8.72% over the last 12 months (as of 06/26/2025). SMOT has traded between $28.40 and $37.49 in this past 52-week period.
The ETF has a beta of 1.27 and standard deviation of 19.41% for the trailing three-year period. With about 106 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) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $68.95 billion in assets, Vanguard Total Stock Market ETF has $488.36 billion. ITOT has an expense ratio of 0.03% and VTI changes 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?
A smart beta exchange traded fund, the VanEck Morningstar SMID Moat ETF (SMOT - Free Report) debuted on 10/04/2022, and offers broad exposure to the Style Box - All 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is sponsored by Van Eck. It has amassed assets over $382 million, making 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
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.
Operating expenses on an annual basis are 0.49% for SMOT, making it on par with most peer products in the space.
SMOT's 12-month trailing dividend yield is 1.19%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For SMOT, it has heaviest allocation in the Consumer Discretionary sector --about 21.6% of the portfolio --while Industrials and Healthcare round out the top three.
Looking at individual holdings, Corteva Inc (CTVA) accounts for about 1.67% of total assets, followed by Veeva Systems Inc (VEEV) and Lpl Financial Holdings Inc (LPLA).
The top 10 holdings account for about 15.33% of total assets under management.
Performance and Risk
Year-to-date, the VanEck Morningstar SMID Moat ETF has lost about -0.7% so far, and is up about 8.72% over the last 12 months (as of 06/26/2025). SMOT has traded between $28.40 and $37.49 in this past 52-week period.
The ETF has a beta of 1.27 and standard deviation of 19.41% for the trailing three-year period. With about 106 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) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $68.95 billion in assets, Vanguard Total Stock Market ETF has $488.36 billion. ITOT has an expense ratio of 0.03% and VTI changes 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.