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Moat Stocks Supported by Broadening Leadership to Start 2026

16 February 2026

Read Time 7 MIN

U.S. equities opened 2026 with broader leadership. Moat stocks gained support from industrials and staples, while materials, energy, and smaller caps outperformed despite tech volatility.

Moat stocks / economic moat refers to companies that have a durable competitive advantage, such as a strong brand or cost advantage, which helps protect their profitability over time.

Key Risks:

Equity-market risk; concentration in technology shares; small-/mid-cap volatility; currency fluctuations; integration of sustainability risks may result in certain investments being avoided or divested, which could limit diversification; index methodology risk - this risk means that if the index changes its rules or which companies are included, it could impact how the fund performs. These factors can lead to significant losses, and past rallies may not be repeated. Complete information on all risks is available in the prospectus and in the KID/KIID, which can be accessed free of charge at vaneck.com. Past performance does not predict future returns.

Key Takeaways:

Moat Index gained 1.2% in January, aided by industrials and staples as leadership broadened beyond mega-cap tech.
Huntington Ingalls, Entegris, and Applied Materials led gains, driven by defense spending and improving semiconductor sentiment.
SMID Moat Index rose 1.7%, led by materials and energy as smaller-cap stocks outperformed to start 2026.

U.S. equity markets opened 2026 with a constructive tone, posting gains across major benchmarks despite notable swings during the month. The S&P 500 rose 1.5% in January, supported by steady economic data and some easing in inflation-related concerns, even as investors continued to assess shifting policy expectations under the new administration. Market leadership broadened modestly beyond the largest mega-cap technology names. More defensive sectors such as energy, materials, and consumer staples led performance, while financials, technology, and health care lagged. Smaller-cap stocks outperformed large-caps during the month, highlighting renewed interest in cyclical and valuation-sensitive areas of the market.

Within this market environment, the Morningstar Wide Moat Focus Index (the “Moat Index) gained 1.2% in January. While the Index finished the month just behind the S&P 500, it got off to a strong start and was up roughly 4% mid-month, leading the benchmark through most of January. Relative performance shifted late in the month as concerns around artificial intelligence disrupting software business models weighed on markets, with a more pronounced impact on the Moat Index. Sector allocation, particularly overweights in industrials and consumer staples, was the primary driver of relative performance versus the S&P 500, while stock selection detracted during the month.

Smaller-cap equities posted stronger gains during the month, notably outpacing large-cap stocks as market leadership broadened early in the year. The Morningstar US Small-Mid Cap Moat Focus Index (the “SMID Moat Index”) rose 1.7% in January but underperformed both small- and mid-cap benchmarks. Relative performance was weighed down primarily by stock selection, while sector allocation was largely neutral during the month. Despite the underperformance, performance across smaller-cap companies more broadly reflected improving sentiment toward economically sensitive businesses at the start of the year.

Smaller-Cap Lead the Way to Start 2026

Source: Morningstar. Data as of 31/01/2026. Past performance is no guarantee of future results. Index performance is not representative of fund performance. It is not possible to invest directly in an index. Please see index definitions and other important disclosures at the end of this content.

Moat Index Highlights: Industrials and Semiconductors Drive Gains

In January, relative performance within the Moat Index was driven primarily by sector allocation, while stock selection detracted during the month. Overweights in industrials and consumer staples were the largest contributors to relative performance versus the S&P 500, helping offset headwinds from security selection. While technology holdings featured among the top individual contributors, overall selection effects were negative, consistent with broader market pressure on several software and technology-oriented names late in the month.

Huntington Ingalls Industries Inc. (HII) was the top contributor to Moat Index performance during the month, with shares rising roughly 24%. The stock benefited from renewed investor focus on U.S. defense spending and shipbuilding capacity, following commentary around higher long-term defense budgets and increased emphasis on naval modernization. Morningstar continues to view Huntington Ingalls’ position as the largest independent U.S. military shipbuilder as a key source of its wide economic moat, supported by long-dated contracts and high barriers to entry.

Semiconductor-related holdings were also key contributors during the month, led by Entegris Inc. (ENTG) and Applied Materials Inc. (AMAT). Shares of Entegris surged more than 40% in January, reflecting improving sentiment around semiconductor capital spending and advanced chip manufacturing. Applied Materials gained roughly 25% during the month, as investors responded to its exposure to leading-edge wafer fabrication and advanced packaging. Morningstar views Entegris’ proprietary materials and high switching costs, alongside Applied Materials’ broad equipment portfolio and deep customer integration, as central to the durable competitive positions of both companies within the semiconductor ecosystem.

Other top contributors within the Moat Index during the month included Constellation Brands Inc. (STZ), a global beverage alcohol producer, and IDEX Corp. (IEX), a diversified industrial manufacturer.

Companies detracting the most from Moat Index performance in January were concentrated within technology, particularly among software-oriented companies. Weakness in these names aligned with late-month market concerns around artificial intelligence disrupting traditional software business models. Detractors included Salesforce Inc. (CRM), a provider of enterprise cloud software; Workday Inc. (WDAY), a human capital management and financial software firm; Tyler Technologies Inc. (TYL), a software provider focused on the public sector; Adobe Inc. (ADBE), a digital media and software company; and Broadridge Financial Solutions Inc. (BR), a provider of investor communications and technology solutions.

Moat Index Top Contributors and Detractors - January 2026

Contributors

Company	Ticker	Sector	Avg. Weight (%)	Contribution (%)
Huntington Ingalls Industries Inc.	HII	Industrials	2.80	0.66
Entegris Inc.	ENTG	Technology	1.24	0.50
Applied Materials Inc.	AMAT	Technology	1.91	0.49
Constellation Brands Inc.	STZ	Consumer Staples	2.35	0.34
IDEX Corp.	IEX	Industrials	2.57	0.31

Detractors

Company	Ticker	Sector	Avg. Weight (%)	Contribution (%)
Salesforce Inc.	CRM	Technology	2.54	-0.50
Workday Inc.	WDAY	Technology	2.32	-0.42
Tyler Technologies Inc.	TYL	Technology	2.21	-0.41
Adobe Inc.	ADBE	Technology	2.48	-0.40
Broadridge Financial Solutions Inc.	BR	Industrials	2.30	-0.27

Source: Morningstar. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein.

SMID Moat Index Highlights: Materials and Energy Lead

The SMID Moat Index finished January higher, supported by strong contributions from materials, energy, and industrial holdings. Sector allocation was broadly neutral during the month, and relative performance reflected a mix of positive contributors and areas of weakness. More broadly, performance trends pointed to improving sentiment toward smaller and more economically sensitive companies at the start of the year.

Albemarle Corp. (ALB) was the top contributor to SMID Moat Index performance during the month, with shares rising 20.6% amid improving sentiment across the lithium complex. The stock benefited from signs that lithium pricing may be stabilizing after a prolonged downturn, alongside growing confidence in supply discipline across the industry. Investors also favored Albemarle’s position near the low end of the cost curve, with its high-quality brine assets and integrated production footprint viewed as advantages in a still-challenged pricing environment. Morningstar assigns the company an economic moat, driven by its low-cost lithium and bromine production, and believes Albemarle is well positioned to benefit as the lithium market moves toward better balance over time.

SLB Ltd. (SLB) was another key contributor, with shares rising roughly 26% during the month as energy markets strengthened and visibility improved around global offshore and international oilfield activity. SLB provides oilfield services, technology, and digital solutions to energy producers worldwide. Morningstar views the company’s scale, technological leadership, and extensive customer relationships as central to its moat, particularly as energy companies prioritize efficiency and capital discipline.

Huntington Ingalls Industries Inc. (HII) also contributed positively within the SMID Moat Index, alongside CF Industries Holdings Inc. (CF), a producer of nitrogen fertilizers, and Nordson Corp. (NDSN), a manufacturer of precision dispensing and industrial technology equipment.

Companies detracting the most from SMID Moat Index performance during January included Humana Inc. (HUM), a health insurance provider; Workday Inc. (WDAY), an enterprise software company; Fidelity National Information Services Inc. (FIS), a financial technology firm; Acuity Inc. (AYI), a lighting and building management solutions provider; and Atlassian Corp. (TEAM), a collaboration software company.

SMID Moat Index Top Contributors and Detractors - January 2025

Contributors

Company	Ticker	Sector	Avg. Weight (%)	Contribution (%)
Albemarle Corp.	ALB	Materials	1.92	0.40
SLB Ltd.	SLB	Energy	1.42	0.37
Huntington Ingalls Industries Inc.	HII	Industrials	1.56	0.37
CF Industries Holdings Inc.	CF	Materials	1.31	0.27
Nordson Corp.	NDSN	Industrials	1.43	0.20

Detractors

Company	Ticker	Sector	Avg. Weight (%)	Contribution (%)
Humana Inc.	HUM	Health Care	1.24	-0.30
Workday Inc.	WDAY	Technology	1.29	-0.23
Fidelity National Information Services Inc.	FIS	Financials	1.35	-0.23
Acuity Inc.	AYI	Industrials	1.38	-0.20
Atlassian Corp.	TEAM	Technology	0.64	-0.17

Choose Your Moat Strategy

VanEck’s suite of moat investing strategies is powered by Morningstar’s equity research team, which seeks quality companies trading at attractive valuations. The below ETFs offer access to moat companies across market segments:

VanEck Morningstar US Wide Moat UCITS ETF (MOTU): Seeks exposure to US companies considered by Morningstar’s equity analysts to have durable competitive advantages and appealing valuations.

VanEck Morningstar US ESG Wide Moat UCITS ETF (MOAT): Invests in potentially attractively priced, ESG-filtered US companies identified for sustainable competitive advantages by Morningstar. ESG Screens include exclusion of companies deriving revenues from Controversial Weapons, Civilian Firearms and Thermal Coal as defined by Sustainalytics as well as companies with higher levels of ESG-related risks according to Sustainalytics Estimates. Applying ESG Screens might also cause the investment universe to be limited in size, and the ETF may perform differently compared to non-screened portfolios. Investors should check all the characteristics of the fund before making any investment decision. Relevant disclosures can be found on fund page as well as under this link.

VanEck Morningstar US SMID Moat UCITS ETF (SMOT): Focuses on potentially undervalued US small- and mid-cap companies identified for their possible durable competitive advantages.

VanEck Morningstar Global Wide Moat UCITS ETF (GOAT): Targets high-quality global companies with wide economic moats and potential for long-term growth according to Morningstar.

The ETFs mentioned involve several risks. These include stock market risk (the value of your investment can go up or down), concentration risk (the ETFs may focus on certain sectors or companies and invest in fewer securities than those tracking plain benchmarks), and currency risk (returns can be affected by exchange rate changes).

Additional risks include valuation risk (companies that seem cheap may not perform well), smaller company risk (as smaller firms can be more volatile. Because the ETFs use equal weighting, each company has the same impact on performance, which may lead to different results compared to market-cap-weighted benchmarks. There’s also a chance the ETF doesn’t fully match its index performance (tracking error).

For further information on risks and other important information, please refer to the KID/KIID and the Prospectus of the funds, available at www.vaneck.com before investing.

To receive more Moat Investing insights, sign up to our newsletter.

The source for all performance data points, contributions, and company research is Morningstar Direct, as of 11 February 2026.

IMPORTANT INFORMATION

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This material is only intended for general and preliminary information and does not constitute an 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 on the basis of this information. All relevant documentation must be first consulted.

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. Information provided by third party sources is believed to be reliable and has not been independently verified for accuracy or completeness and cannot be guaranteed.

VanEck Morningstar US ESG Wide Moat UCITS ETF ("ETF") is a sub-fund of VanEck UCITS ETFs plc, a UCITS umbrella investment company, registered with the Central Bank of Ireland, passively managed and tracking an equity index. The product described herein aligns to Article 8 Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector. Information on sustainability-related aspects pursuant to that regulation can be found on www.vaneck.com. Investors must consider all the fund's characteristics or objectives as detailed in the prospectus, in the sustainability-related disclosures or related documents before making an investment decision.

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Please refer to the Prospectus – in English language - and the KID/KIID - in local language - before making any final investment decisions and for full information on risks. These documents can be obtained free of charge at www.vaneck.com, from the ManCo or from the appointed facility agent. VanEck Morningstar Global Wide Moat UCITS ETF ("ETF") is a sub-fund of VanEck UCITS ETFs plc, a UCITS umbrella investment company, registered with the Central Bank of Ireland, passively managed and tracking an equity index.

VanEck Morningstar US Wide Moat UCITS ETF ("ETF") is a sub-fund of VanEck UCITS ETFs plc, a UCITS umbrella investment company , registered with the Central Bank of Ireland, passively managed and tracking an equity index.

VanEck Morningstar US SMID Moat UCITS ETF ("ETF") is a sub-fund of VanEck UCITS ETFs plc, a UCITS umbrella investment company, registered with the Central Bank of Ireland, passively managed and tracking an equity index.

Morningstar® US Sustainability Moat Focus Index is a trade mark of Morningstar Inc. and has been licensed for use for certain purposes by VanEck. VanEck’s ETF is not sponsored, endorsed, sold or promoted by Morningstar and Morningstar makes no representation regarding the advisability in VanEck’s ETF. Effective December 15, 2023 the carbon risk rating screen was removed from the Index. Effective December 17, 2021 the Morningstar® Wide Moat Focus IndexTM has been replaced with the Morningstar® US Sustainability Moat Focus Index. 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. It is not possible to invest directly in an index.

The Morningstar® Global Wide Moat Focus IndexSM was created and is maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck’s ETF and bears no liability with respect to that ETF or any security. Morningstar is a registered trademark of Morningstar, Inc. Morningstar Global Wide Moat Focus Index is a service mark of Morningstar, Inc. It is not possible to invest directly in an index.

The Morningstar® Wide Moat Focus IndexSM are service marks of Morningstar, Inc. and have been licensed for use for certain purposes by VanEck. VanEck’s ETF is not sponsored, endorsed, sold or promoted by Morningstar, and Morningstar makes no representation regarding the advisability of investing in the ETF. It is not possible to invest directly in an index.

Morningstar® US Small-Mid Cap Moat Focus IndexSM are service marks of Morningstar, Inc. and have been licensed for use for certain purposes by VanEck. VanEck’s ETF is not sponsored, endorsed, sold or promoted by Morningstar, and Morningstar makes no representation regarding the advisability of investing in the ETF. It is not possible to invest directly in an index.

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. It is not possible to invest directly in an index.

Source: VanEck.

Performance quoted represents past performance. Current performance may be lower or higher than average annual returns shown. Performance data for the Irish domiciled ETFs is displayed on a Net Asset Value basis, in Base Currency terms, with net income reinvested, net of fees. Returns may increase or decrease as a result of currency fluctuations. Performance should be assessed over a medium- to long-term.

Investing is subject to risk, including the possible loss of principal. For any unfamiliar technical terms, please refer to ETF Glossary | VanEck.

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

Important Disclosure

This is a marketing communication. Please refer to the prospectus of the UCITS and to the KID before making any final investment decisions.

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, VanEck Switzerland AG, VanEck Securities UK Limited and their 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 is believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Brokerage or transaction fees may apply.

VanEck Asset Management B.V., the management company of VanEck Morningstar US Sustainable Wide Moat UCITS ETF (the "ETF"), a sub-fund of VanEck UCITS ETFs plc, is a UCITS management company under Dutch law registered with the Dutch Authority for the Financial Markets (AFM). The ETF is registered with the Central Bank of Ireland, passively managed and tracks an equity index. Investing in the ETF should be interpreted as acquiring shares of the ETF and not the underlying assets. Investors must read the sales prospectus and key investor information before investing in a fund. These are available in English and the KIIDs/KIDs in certain other languages as applicable and can be obtained free of charge at www.vaneck.com, from the Management Company or from the following local information agents:
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Portugal - Paying Agent: BEST – Banco Eletrónico de Serviço Total, S.A.
Luxembourg - Facility Agent: VanEck (Europe) GmbH

Morningstar® US Sustainability Moat Focus Index is a trade mark of Morningstar Inc. and has been licensed for use for certain purposes by VanEck. VanEck Morningstar US Sustainable Wide Moat UCITS ETF is not sponsored, endorsed, sold or promoted by Morningstar and Morningstar makes no representation regarding the advisability in VanEck Morningstar US Sustainable Wide Moat UCITS ETF.
Effective December 17, 2021 the Morningstar® Wide Moat Focus IndexTM has been replaced with the Morningstar® US Sustainability Moat Focus Index.
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.
It is not possible to invest directly in an index.

All performance information is based on historical data and does not predict future returns. Investing is subject to risk, including the possible loss of principal.

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