• Moat-Investments

    MOAT goes ESG

    Brandon Rakszawski, Senior ETF Product Manager
     

    The VanEck Morningstar US Wide Moat UCITS ETF began tracking Morningstar US Sustainable Moat Focus Index after the market close on 17 December 2021. The fund was renamed VanEck Morningstar US Sustainable Wide Moat UCITS ETF to reflect the updated investment strategy. As a result of the change, investors in the ETF receive a more sustainable exposure, while maintaining the benefits of the existing investing approach, based on buying relatively attractively priced shares of companies possessing long-term competitive advantages.

    Rationale

    VanEck is striving to improve its sustainable footprint by increasingly focusing on products following sustainable investment strategies. VanEck Morningstar US Wide Moat UCITS ETF had not directly incorporated any Sustainability considerations. Conversely, the new underlying index of the ETF will introduce product involvement screens related to controversial weapons, civilian firearms and thermal coal, as well as companies deriving majority of the revenues from Tobacco. It will also screen companies involved in severe controversies during the last three years and those with elevated levels of ESG- and Carbon-related risks, according to Sustainalytics.

    What will change in the investment process?

    In addition to selection parameters incorporated in the incumbent index to select attractively valued companies with long-term competitive advantages, the Morningstar US Sustainability Moat Focus Index only includes stocks with the following attributes:

    • Product Involvement
      • No involvement in production of controversial weapons
      • No involvement in civilian firearms production
      • No involvement in Thermal Coal extraction or power generation
      • Not more than 50% of revenue derived from Tobacco Production and Distribution
    • Sustainalytics ESG Scores
      • ESG Risk rating not High or Severe
      • Carbon Risk rating not High or Severe
      • Controversy rating of “Severe” not reached at any point in time during the last 3 years
    • Momentum Screen
      • Not in the worst 20% of yearly performers among eligible securities


    Additionally, the index selection targets a Sustainalytics ESG Risk score equivalent to top 32.5% in the respective Morningstar Fund universe by means of iterative selection process that will replace the worst ESG performers until the target score is reached. The rebalancing frequency of the sub-portfolios will change from Semi-Annual to Annual . For further information about the change, please consult the Q&A we published on 24 November 2021. Investors should always consider risks before investing.


  • Important Disclosure

    For informational and advertising purposes only.

    This information originates from VanEck (Europe) GmbH which has been appointed as distributor of VanEck products in Europe by the Management Company VanEck Asset Management B.V., incorporated under Dutch law and registered with the Dutch Authority for the Financial Markets (AFM). VanEck (Europe) GmbH with registered address at Kreuznacher Str. 30, 60486 Frankfurt, Germany, is a financial services provider regulated by the Federal Financial Supervisory Authority in Germany (BaFin). The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. VanEck (Europe) GmbH and its associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of VanEck. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. All indices mentioned are measures of common market sectors and performance. It is not possible to invest directly in an index.

    VanEck Morningstar US Wide Moat UCITS ETF (the “Fund”) is a sub-fund of VanEck® UCITS ETFs plc., organised under the laws of Ireland, managed by VanEck Investments Ltd. VanEck Investments Ltd delegated the investment management of the Fund to Van Eck Associates Corporation, an investment manager regulated by the U.S. Securities and Exchange commission (SEC). Any investment decision must be made on the basis of the prospectus and the key investor information document (“KIID”), which is available at www.vaneck.com. These are available in English and certain other languages at www.vaneck.com or can be requested free of charge from VanEck Investments Ltd or from the relevant local information agent details of whom to be found on www.vaneck.com. The Fund is registered with the Central Bank of Ireland and tracks an equity index.

    Morningstar® Wide Moat Focus IndexTM is a trade mark of Morningstar inc. and has been licensed for use for certain purposes by VanEck. VanEck Morningstar US Wide Moat UCITS ETF is not sponsored, endorsed, sold or promoted by Morningstar and Morningstar makes no representation regarding the advisability of investing in VanEck Morningstar US Wide Moat UCITS ETF.

    The S&P 500 Index (“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 © 2020 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.spdji.com. 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.

    S&P 500® Index: consists of 500 widely held common stocks covering the leading industries of the U.S. economy. Morningstar® Wide Moat Focus IndexTM consists of at least 40 U.S. companies identified as having sustainable, competitive advantages, and whose stocks are the most attractively priced, according to Morningstar.

    All performance information is historical and is no guarantee of future results. Investing is subject to risk, including the possible loss of principal. You must read the Prospectus and KIID before investing.

    No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.

    © VanEck (Europe) GmbH

     

  • Authored by

    Brandon Rakszawski
    Senior ETF Product Manager

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