What Makes a Moat?
Economic moats are sustainable competitive advantages that are expected to allow companies to fend off competition and sustain profitability into the future.
The Philosophy Behind the Strategy
The moat investing philosophy, powered by Morningstar’s equity research, brings together its Economic Moat Rating and its forward-looking Fair Value Estimate.
Visit the fund page for the fact sheet, holdings, performance and more.
Finding Economic Moats
Morningstar has identified five sources of economic moats.
Focus on Valuations
Morningstar's forward-looking valuation approach allows long-term investors to look beyond a company's current price and potential noise in the market. Each company is assigned a current fair value based on projected future cash flows, which is assessed against its current price.
Morningstar Analyst Team
Morningstar’s equity research team of more than 100 analysts covers over 1,500 companies globally. More than 200 asset managers and 75,000 financial advisors rely on Morningstar’s research. All of Morningstar’s equity analysts follow a single, consistent research methodology.
Proven Long-Term U.S. Strategy
Applying Morningstar’s moat investing philosophy to U.S. companies has historically generated excess returns relative to the broad U.S. equity markets. Strong stock selection has been a primary driver of excess returns since 2007 for this long-term, core investment strategy.
Cumulative Index Return
2/14/07 - 12/31/23
Source: Morningstar. Past performance is no guarantee of future results. Index performance is not representative of fund performance. For fund performance current to the most recent month-end, visit vaneck.com. Investors cannot invest directly in the Index.
Related Funds
Leverage Morningstar’s forward-looking moat investment philosophy across global equity markets.Related Resources
April 10, 2024
Mid-caps posted stronger returns than large-caps in March. Meanwhile, a broadening market may present a supportive trend for the Morningstar Wide Moat Focus Index.
Important Definitions & Disclosures
Important Risk Disclosures
You can lose money by investing in the VanEck Morningstar Wide Moat Fund (MWMZX). Any investment in the Fund should be part of an overall investment program rather than a complete program. An investment in the Fund may be subject to risks which include, among others, concentration, equity securities, index tracking and data, consumer staples sector, health care sector, industrials sector, information technology sector, investing in the underlying fund, market, medium-capitalization companies, non-diversification, operational, portfolio turnover and replication management risks, all of which may adversely affect the Fund. Medium-capitalization companies may be subject to elevated risks. The Fund's assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors.
An investment in the VanEck Morningstar Wide Moat ETF (MOAT) may be subject to risks which include, among others, risks related to investing in equity securities, consumer discretionary sector, health care sector, industrials sector, information technology sector, financials sector, medium-capitalization companies, market, operational, high portfolio turnover, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversification and index-related concentration risks, all of which may adversely affect the Fund. Medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Morningstar ESG MOAT ETF (MOTE) may be subject to risks which include, among others, risks related to an ESG investing strategy, equity securities, consumer discretionary sector, financials sector, consumer staples sector, information technology sector, medium-capitalization companies, market, operational, high portfolio turnover, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified and index-related concentration risks, all of which may adversely affect the Fund. Medium-capitalization companies may be subject to elevated risks.
MOTE's ESG (environmental, social and governance) strategy could cause it to perform differently compared to funds that do not have an ESG focus. The Fund’s ESG strategy may result in the Fund investing in securities or industry sectors that underperform other securities or underperform the market as a whole. The companies included in the US Sustainability Moat Focus Index may differ from companies included in other indices that use similar ESG screens. The Fund is also subject to the risk that the companies identified by the Index provider do not operate as expected when addressing ESG issues. Additionally, the Index provider’s proprietary valuation model may not perform as intended, which may adversely affect an investment in the Fund. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the Fund’s ability to invest in accordance with its ESG strategy.
An investment in the VanEck Morningstar International Moat ETF (MOTI) may be subject to risks which include, among others, risks related to investing in equity securities, communication services sector, consumer discretionary sector, financials sector, information technology sector, health care sector, medium-capitalization companies, foreign securities, foreign currency, emerging market issuers, special risk considerations of investing in Asian, Chinese, European and United Kingdom issuers, depositary receipts, cash transactions, market, operational, high portfolio turnover, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversification and index-related concentration risks, all of which may adversely affect the Fund. Emerging market issuers and foreign securities may be subject to securities markets, political and economic, investment and repatriation restrictions, different rules and regulations, less publicly available financial information, foreign currency and exchange rates, operational and settlement, and corporate and securities laws risks. Medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Morningstar Global Wide Moat ETF (MOTG) may be subject to risks which include, among others, risks related to investing in equity securities, industrials sector, financials sector, health care sector, consumer staples sector, information technology sector, medium-capitalization companies, foreign securities, foreign currency, special risk considerations of investing in Asian and European issuers, depositary receipts, cash transactions, market, operational, high portfolio turnover, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversification and index-related concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Morningstar SMID Moat ETF (SMOT) may be subject to risks which include, among others, equity securities, small- and medium-capitalization companies, consumer discretionary sector, financials sector, health care sector, industrials sector, information technology sector, market, operational, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and concentration risks, all of which may adversely affect the Fund. Small- and medium-capitalization companies may be subject to elevated risks.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider a Fund’s investment objective, risks, charges and expenses carefully before investing. To obtain a prospectus and summary prospectus for VanEck Funds and VanEck ETFs, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus for VanEck Funds and VanEck ETFs carefully before investing.
Important Disclosures
This content is published in the United States for residents of specified countries. Investors are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this content. Nothing in this content should be considered a solicitation to buy or an offer to sell shares of any investment in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction, nor is it intended as investment, tax, financial, or legal advice. Investors should seek such professional advice for their particular situation and jurisdiction.
This is not an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned herein. The Fund(s) may or may not own the securities and, if such securities are owned, no representation is being made that such securities will continue to be held. Holdings will vary for the Fund(s) and their corresponding Indices. For a complete list of holdings in the ETF, please click here.
Fair value estimate: The Morningstar analyst’s estimate of what a stock is worth.
Morningstar Wide Moat Focus Index consists of U.S. companies identified as having sustainable, competitive advantages and whose stocks are the most attractively priced, according to Morningstar. Morningstar Global ex-US Moat Focus Index consists of international companies identified as having sustainable, competitive advantages and whose stocks are attractively priced.
The S&P 500® Index consists of 500 widely held common stocks covering industrial, utility, financial and transportation sector; as an Index, it is unmanaged and is not a security in which investments can be made.
The Morningstar® Wide Moat Focus IndexSM was created and is maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck Morningstar Wide Moat ETF and bears no liability with respect to that ETF or any security. Morningstar® is a registered trademark of Morningstar, Inc. Morningstar® Wide Moat Focus IndexSM is a service mark of Morningstar, Inc.
The S&P 500 Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Van Eck Associates Corporation. Copyright © 2024 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spglobal.com/spdji/en/. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.
The information herein represents the opinion of the author(s), but not necessarily those of VanEck, and these opinions may change at any time and from time to time. Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Historical performance is not indicative of future results. Current data may differ from data quoted. Any graphs shown herein are for illustrative purposes only. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.
Any indices listed are unmanaged indices and include the reinvestment of all dividends, but do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in a fund. An index’s performance is not illustrative of a fund’s performance. Indices are not securities in which investments can be made.
MOAT, MOTE, MOTI, MOTG and SMOT Fund shares are not individually redeemable and will be issued and redeemed at their net asset value (NAV) only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Shares may trade at a premium or discount to their NAV in the secondary market. You will incur brokerage expenses when trading Fund shares in the secondary market. Past performance is no guarantee of future results.
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