Moat Index Leans into Tech Opportunities

Key Takeaways

• Moat Index is opportunistically accumulating tech names including NVIDIA and Broadcom.
• Growth exposure broadly is also increasing to levels last seen following the beginning of the rate hiking cycle in 2022 and 2023.
• Contrarian positioning remains with 27% discount to fair value, according to Morningstar’s price to fair value ratio.
• Value also remains a notable overweight relative to the S&P 500 Index.

The Morningstar^® Wide Moat Focus Index^SM (the “Moat Index” or “Index”) underwent its quarterly review on March 20, 2026. 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:

Moat Index Review Highlights:

• Tech Dislocations Driving Opportunities in Certain Industries

  Continued AI uncertainty paired with the evolving fallout on certain sub-industries within tech are helping to drive opportunities within the sector. The Moat Index put NVIDIA at full weight this quarter and AI-darling, Broadcom, also appeared attractive. Other companies in the software space were added to the Index for the first time. Cyber security company, Palo Alto Networks, and data analysis firm, Datadog, were both added amidst pressure on share prices.

• First Timers Abound

  Among the 11 companies added to the Index’s sub-portfolio under review in March were five newcomers: Blackstone, Broadcom, Datadog, Fair Isaac and Palo Alto Networks. These companies have maintained wide moat ratings for some time with exception of Blackstone and Datadog, who were upgraded in late 2025. Otherwise, most were trading at relatively attractive levels for the first time in many years.

• SaaSpocalypse Has Muted Impact on Index Review

  While software has been a modest overweight relative to the S&P 500 Index, only three stocks were downgraded in Morningstar’s March reassessment of software companies. Adobe, Salesforce and Workday all saw their moat rating downgraded to narrow and began their phase out from the Index this quarter.

1Q 2026 Moat Index Review Results

Moat Index Sector Shifts Following 1Q 2026 Review

Moat Index Sector Exposure Relative to S&P 500 Index

Moat Index Style Exposure Relative to S&P 500 Index: Value Bias Persists, But Growth Increased

Source: Morningstar. As of 3/20/2026 unless otherwise noted. Index performance is not illustrative of fund performance. It is not possible to invest directly in an index.

Access Quality Companies at Attractive Valuations

VanEck Morningstar Wide Moat ETF (MOAT) and VanEck Morningstar Wide Moat Fund seek to replicate as closely as possible, before fees and expenses the price and yield performance of the Morningstar Wide Moat Focus Index.