For investors seeking momentum, VanEck Vectors Morningstar Wide Moat ETF (MOAT - Free Report) is probably on radar now. The fund just hit a 52-week high, and is up 22.6% from its 52-week low price of $34.73/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
MOAT in Focus
This fund provides exposure to the most attractively valued securities having sustainable competitive advantage. It holds 49 securities in its basket with key holdings in the healthcare and consumer discretionary sectors. The product charges 49 bps in annual fees from investors (see: all the Large Cap ETFs here).
Why the Move?
This corner of the broad investing world has been an area to watch lately given that investors are chasing quality in an overvalued market. The U.S. stock market is in the midst of the second-largest bull run with more upside potential on tax reforms, strong corporate earnings and accelerated global economic growth. However, geopolitical tension and political instability still pose risk to the bulls. In such a scenario, moat stocks offer solid returns while ensuring safety of income. Wide moat companies not only warrant rapid growth but also preserve value via returns on invested capital over the long term. These companies are well positioned with huge liquid cash and a strong balance sheet, making it difficult for their rivals to outdo.
More Gains Ahead?
It seems that MOAT might remain strong given a high weighted alpha of 20.80% and a mediocre 20-day volatility of 7.34%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.
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