Moat Index Sees Tech Uptick and Consumer Goods Opportunities
08 July 2025
Read Time 2 MIN
The Morningstar® Wide Moat Focus IndexSM (the “Moat Index” or “Index”) underwent its quarterly review on June 20, 2025. The Index systematically targets attractively priced, high quality U.S. companies each quarter, as identified by Morningstar’s equity research analysts. Below are a few highlights from the latest review. The full results are available here:
Download the full report – Morningstar® Wide Moat Focus IndexSM Reconstitution (Q3 2025)
Moat Index Review Takeaways:
- Tech Weight Increases, Despite Removals
The Moat Index locked in gains from several strong performing tech names over the quarter including Microchip Technologies. However, several additions to the sub-portfolio under review (Applied Materials, Salesforce, and Workday) paired with deletions across other sectors resulted in a modest increase in the Index’s tech sector weight. At approximately 5% underweight compared to the S&P 500 Index, the tech sector is now at the lowest underweight in some time. The exposure within tech does vary from the broader market, with a focus on undervalued application software and semiconductor companies.
- Consumer Goods Enter
A handful of consumer goods companies were added to the sub-portfolio under review following a choppy quarter. Global tariff uncertainty and macro headwinds put pressure on several wide moat companies, presenting a potential opportunity amidst the uncertainty. Additions in June include PepsiCo, Clorox Company, and The Hershey Company.
- Valuation Focus Drives Value Posture
Despite the tech additions discussed above, value remains the notable overweight relative to the broad market. Growth accounts for the majority of underweight, with modest underweight to core/blend stocks. This trend has been in place for the better part of the last year and a half as U.S. equity markets have appreciated consistently, despite periods of short-term volatility. The Moat Index’s price-to-fair value was reduced modestly to 0.80 following the review, implying a 20% discount to fair value. This stands in stark contrast to the S&P 500 Index which is currently fairly value (1.0).
Key risks: The Index is concentrated in U.S. equities and specific sectors, which can increase volatility and the potential for loss; valuation‐driven strategies may lag the broader market for extended periods; investors can lose some or all of their capital. It is not possible to invest directly in an index.
2Q 2025 Moat Index Review Results
Moat Index Sector Shifts Following 2Q 2025 Review
Moat Index Sector Exposure Relative to S&P 500 Index
Moat Index Style Exposure Relative to S&P 500 Index: Value Bias Persists
Source: Morningstar. As of 20/06/2025 unless otherwise noted.
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VanEck Morningstar US Wide Moat UCITS ETF (MOTU) seeks to replicate as closely as possible, before fees and expenses the price and yield performance of the Morningstar® Wide Moat Focus IndexSM. This ETF is subject to limited diversification and equity market risk. For a complete overview of the risks involved, please refer to the full risk disclosure in the prospectus and the KID/KIID.
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Source for all data unless otherwise noted: Morningstar.
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