11 May 2022
VanEck Blogs | Moat Investing
MOAT: 10 Years of Focusing on Valuation

The focus on valuation by the Morningstar equity research team has been a central theme for the VanEck Morningstar Wide Moat ETF (MOAT) since its launch 10 years ago.

April marked the 10-year anniversary of the listing of VanEck Morningstar Wide Moat ETF (MOAT). Over the last decade, the ETF has had much success from both a performance and asset gathering perspective. The ETF finished the month of April with just under $7B in assets under management and received a five star overall rating from Morningstar. It ranked in the top quartile of its peers for the 3, 5, and 10 year periods as of April 30, 2022. Notably, MOAT was the 13th best performing fund over the last 10 years out of 808 active and passive ETFs and mutual funds in the Morningstar US Fund Large Blend Category.

MOAT Morningstar Rating as of 4/30/2022
Category Overall 3 Year 5 Year 10 Year
Large Blend ★★★★★ ★★★★ ★★★★ ★★★★★
  5 stars of 1212 funds 4 stars of 1212 funds 4 stars of 1104 funds 5 stars of 808 funds

Source: Morningstar. Past performance is no guarantee of future results. See important definitions and disclosures below.

MOAT Morningstar Category Rankings as of 4/30/2022
Morningstar US Fund Large Blend Category
YTD 1 Year 3 Year 5 Year 10 Year
Percentile
Rank
Absolute
Rank
Percentile
Rank
Absolute
Rank
Percentile
Rank
Absolute
Rank
Percentile
Rank
Absolute
Rank
Percentile
Rank
Absolute
Rank
13 152 73 950 23 230 9 87 3 13
Funds Ranked Funds Ranked Funds Ranked Funds Ranked Funds Ranked
1402 1348 1212 1104 808

Source: Morningstar. Past performance is no guarantee of future results.

Moat Index Reaches 15 Years

MOAT seeks to track the Morningstar® Wide Moat Focus IndexSM (the “Moat Index” or “Index”), which systematically represents some of Morningstar equity research’s top U.S. stock picks based on their forward-looking assessment of a company’s competitive advantage (i.e., “moat”) and fair value estimate. The Moat Index features an equally impressive track record with over 15 years of live results. Since launching in early 2007, shortly before the global financial crisis struck, the Index has provided real-time performance through many market environments, both challenging and prosperous.

Through it all, the forward-looking process of Morningstar’s equity research team has driven the Index’s impressive performance. Each of the features of the Index’s methodology (wide moat rated, attractively priced companies, equally weighted) has added to the funds excess returns historically.

Each Moat Index Feature Has Incrementally Improved Performance

2/14/2007 – 4/30/2022

Each Moat Index Feature Has Incrementally Improved Performance

Source: Morningstar. Data represents index total return.

Index performance is not illustrative of Fund performance. Fund performance current to the most recent month end is available by visiting vaneck.com or by calling 800.826.2333. Past performance is no guarantee of future results. Indexes are unmanaged and are not securities in which an investment can be made.

Moat Index’s Focus on Valuation Offers Upside Potential and Downside Buffer

The Moat Index consistently adjusts its exposure to target attractively priced companies among its eligible U.S. wide moat universe. This helps to prevent drastically overpaying for U.S. equity exposure and has contributed to the Index’s defensive posture in periods of market turmoil, such as what we are all experiencing in 2022. It also allows the Index to target attractive entry points when the market is oversold, offering potentially more upside in recoveries if the market begins to price in the true fair value of those oversold stocks.

Moat Index’s Focus on Valuation Offers Upside Potential and Downside Buffer

Source: Morningstar. Index performance is not illustrative of Fund performance. Fund performance current to the most recent month end is available by visiting vaneck.com or by calling 800.826.2333. Past performance is no guarantee of future results. Indexes are unmanaged and are not securities in which an investment can be made.

Average Annual Returns as of 3/31/2022
  1 Year 5 Year Since Inception
(4/24/2012)
MOAT (NAV) 9.01 16.27 15.55
MOAT (Price) 8.99 16.30 15.56
Moat Index 9.67 16.84 16.12
S&P 500 Index 15.65 15.99 15.03

Source: VanEck, Morningstar. MOAT expenses: Gross 0.46% and Net 0.46%. Expenses are capped contractually at 0.49% until February 1, 2023. Cap excludes acquired fund fees and expenses, interest expense, trading expenses, taxes and extraordinary expenses.

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Please call 800.826.2333 or visit vaneck.com for performance current to the most recent month ended.

The "Net Asset Value" (NAV) of a Fund is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF 's intraday trading value. Investors should not expect to buy or sell shares at NAV.

Effective June 20, 2016, Morningstar implemented several changes to the Morningstar Wide Moat Focus Index construction rules. Among other changes, the index increased its constituent count from 20 stocks to at least 40 stocks and modified its rebalance and reconstitution methodology. These changes may result in more diversified exposure, lower turnover, and longer holding periods for index constituents than under the rules in effect prior to this date. Past performance is no guarantee of future results.

We look forward to the decades ahead and, if you have not already signed up, we encourage you to receive more Moat Investing insights, via our subscription center.

IMPORTANT DEFINITIONS & DISCLOSURES  

This material may only be used outside of the United States.

This is not an offer to buy or sell, or a recommendation of any offer to buy or sell any of the securities mentioned herein. Fund holdings will vary. For a complete list of holdings in VanEck Mutual Funds and VanEck Vectors ETFs, please visit our website at www.vaneck.com.

The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. 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. Any opinions, projections, forecasts, and forward-looking statements presented herein are valid as of the date of this communication and are subject to change without notice. The information herein represents the opinion of the author(s), but not necessarily those of VanEck.

The views contained herein are not to be taken as advice or a recommendation to buy or sell any investment in any jurisdiction, nor is it a commitment from Van Eck Associates Corporation or its subsidiaries to participate in any transactions in any companies mentioned herein. This content is published in the United States. Investors are subject to securities and tax regulations within their applicable jurisdictions that are not addressed herein.

All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.

Brandon
Brandon Rakszawski
Senior Product Manager