This month marks the five year birthday party for VanEck Global’s Morningstar Wide Moat (MOAT 87,22 +0,13 +0,15%) ETF. What better way to celebrate than by beating the biggest, baddest ETF of them all, State Street’s SPDR S&P 500 (SPY 515,71 +2,85 +0,56%). No, they don’t have the SPDR beat on AUM, but they do on gains. MOAT’s up 101.6%. SPY’s up 85.4%.
Patrick Finn, the director of ETF business development at VanEck recently spoke with Julie Cooling, the CEO of the RIA Channel, during the fifth annual 2017 Morningstar Investment Conference. The secret sauce behind MOAT is not so secret really. It simply seeks to give investors holdings in Morningstar equity analysts’ top stocks for capital appreciation, with strong competitive advantages. The fund tracks the Morningstar Wide Moat Focus Index.
“What’s interesting about it is that you are accessing high quality companies at the right entry points,” he says. He explains how they rebalance the fund and time the market in the video. “If you’re attractively priced, you’re in the portfolio,” he says.
VanEck’s MOAT is a bit like an active ETF insofar as it relies on regular fundamental analysis and stock picking, rather than just tracking an index. “The inputs are very much active. You have the bright minds of Morningstar’s analysts that are covering these stocks, ripping up the 10-Ks, meeting with managers and assessing what they feel these equities are worth.”
Moat investing is a long-term strategy and is not intended for tactical allocations. Compared to the S&P 500, the Morningstar Wide Moat Focus Index’s strategy outperformed more frequently through longer holding periods.
Under the Hood
The fund is long only and has 47 stocks with a 12 month trailing yield of just over 1% as of May 23.
Its top 10 stocks are Cerner (CERN 94,92 0,00 0,00%); Amazon (AMZN 178,87 +0,72 +0,40%); Salesforce.com (CRM 314,64 -2,24 -0,71%); Guidewire Software (GWRE 118,78 +2,05 +1,76%); Visa (V 280,53 -2,63 -0,93%); MasterCard (MA 468,49 -8,14 -1,71%); United Technologies (UTX 91,01 -0,78 -0,85%); McKesson (MCK 534,18 +8,30 +1,58%); Varian Medical Systems (VAR 177,07 0,00 0,00%) and Starbucks (SBUX 91,22 -1,24 -1,34%).
Advisors who use MOAT are replacing some of that index core holding with something that’s similar in nature, but has the opportunity to provide alpha.
“You’re in the same sand lot, but are given the opportunity to beat the S&P,” Finn says. VanEck Celebrates Five Years Beating The S&P 500
This month marks the five year birthday party for VanEck Global’s Morningstar Wide Moat (MOAT 87,22 +0,13 +0,15%) ETF. What better way to celebrate than by beating the biggest, baddest ETF of them all, State Street’s SPDR S&P 500 (SPY 515,71 +2,85 +0,56%). No, they don’t have the SPDR beat on AUM, but they do on gains. MOAT’s up 101.6%. SPY’s up 85.4%.
Patrick Finn, the director of ETF business development at VanEck recently spoke with Julie Cooling, the CEO of the RIA Channel, during the fifth annual 2017 Morningstar Investment Conference. The secret sauce behind MOAT is not so secret really. It simply seeks to give investors holdings in Morningstar equity analysts’ top stocks for capital appreciation, with strong competitive advantages. The fund tracks the Morningstar Wide Moat Focus Index.
“What’s interesting about it is that you are accessing high quality companies at the right entry points,” he says. He explains how they rebalance the fund and time the market in the video. “If you’re attractively priced, you’re in the portfolio,” he says.
VanEck’s MOAT is a bit like an active ETF insofar as it relies on regular fundamental analysis and stock picking, rather than just tracking an index. “The inputs are very much active. You have the bright minds of Morningstar’s analysts that are covering these stocks, ripping up the 10-Ks, meeting with managers and assessing what they feel these equities are worth.”
Moat investing is a long-term strategy and is not intended for tactical allocations. Compared to the S&P 500, the Morningstar Wide Moat Focus Index’s strategy outperformed more frequently through longer holding periods.
Under the Hood
The fund is long only and has 47 stocks with a 12 month trailing yield of just over 1% as of May 23.
Its top 10 stocks are Cerner (CERN 94,92 0,00 0,00%); Amazon (AMZN 178,87 +0,72 +0,40%); Salesforce.com (CRM 314,64 -2,24 -0,71%); Guidewire Software (GWRE 118,78 +2,05 +1,76%); Visa (V 280,53 -2,63 -0,93%); MasterCard (MA 468,49 -8,14 -1,71%); United Technologies (UTX 91,01 -0,78 -0,85%); McKesson (MCK 534,18 +8,30 +1,58%); Varian Medical Systems (VAR 177,07 0,00 0,00%) and Starbucks (SBUX 91,22 -1,24 -1,34%).
Advisors who use MOAT are replacing some of that index core holding with something that’s similar in nature, but has the opportunity to provide alpha.
“You’re in the same sand lot, but are given the opportunity to beat the S&P,” Finn says.