Moat Index’s Long-term Track Record Persists Despite Blip
26 February 2021
Read Time 1 MIN
The Morningstar Wide Moat Focus Index (“Moat Index”) ended its four-year streak of outperforming the broad U.S. equity market (as represented by the Morningstar US Market Index) in 2020—returning 15.1% vs 20.9%, respectively. Despite this, the Moat Index’s long-term track record remains impressive.
A recent Morningstar Equity Research report dissects the Moat Index’s 2020 performance and contextualizes these results as the strategy approaches a 14-year live track record. Topics include:
- The compelling long-term track record of the Moat Index over nearly 14 years, including its risk-adjusted return metrics as well as the correlation between holding period length and batting average.1
- How the Moat Index approaches FANMAG (Facebook, Amazon, Netflix, Microsoft, Apple, and Google/Alphabet) stocks and why being underweight in 2020 was a primary headwind that led to underperformance relative to the broad market.
- The Moat Index’s heavy skew towards value stocks at the expense of growth stocks.
- Stock selection as a headwind while sector positioning contributed to performance.
Read the full report: Morningstar Wide Moat Focus Index: Year in Review.
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