No Surprise at Year-End: Moat Investing Outperforms Again in 2023
The Morningstar Wide Moat Focus Index (the “Moat Index”) surged by 7.87% in December outpacing the S&P 500 by over 300 basis points during the month, and ended the 2023 calendar year up 32.41%, or 600 basis points above the S&P 500. The performance of the Moat Index is particularly notable this year, as it came amid a top-heavy market where the mega-cap Magnificent Seven was responsible for much of the market’s overall gains.
Learn more information on current positioning, recent performance, and hear directly from Morningstar’s equity research team for their perspective on market trends and the companies they cover.
- Recap philosophy and process behind moat investing across market caps
- Review drivers of strong performance in 2023
- Live Q&A with Morningstar’s equity research team with focus on select moat-rated companies
Webinar details
January 09, 2024
11:00 AM US ET
Duration 60 MINRelated Topics
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DISCLOSURE
This content is intended for educational purposes only. Please note that the availability of the products mentioned may vary by country, and it is recommended to check with your local stock exchange.
Bristol-Myers Squibb is 1.22% of net assets of the VanEck Morningstar Wide Moat ETF (MOAT) as of 1/8/2024.
Lithia Motors Inc is 1.33% of net assets of the VanEck Morningstar SMID Moat ETF (SMOT) as of 1/8/2024.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. 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. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the speaker(s), but not necessarily those of VanEck or its other employees.
An investment in the VanEck Morningstar Wide Moat ETF (“MOAT”) may be subject to risks which include, among others, investing in equity securities, consumer discretionary, consumer staples, health care, industrials and information technology sectors, medium-capitalization companies, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversification and concentration risks, which may make these investments volatile in price or difficult to trade. Medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Morningstar SMID Moat ETF (“SMOT”) may be subject to risks which include, among others, equity securities, small- and medium-capitalization companies, consumer discretionary sector, financials sector, health care sector, industrials sector, information technology sector, market, operational, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and concentration risks, all of which may adversely affect the Fund. Small- and medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Morningstar International Moat ETF (“MOTI”) may be subject to risks which include, among others, in equity securities, communication services, consumer discretionary, financials, industrials and health care sectors, medium-capitalization companies, foreign securities, foreign currency, special risk considerations of investing in Asian, Chinese, European United Kingdom and emerging market issuers, depositary receipts, cash transactions, market, operational, high portfolio turnover, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversification and concentration risks, which may make these investments volatile in price or difficult to trade. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Morningstar Global Wide Moat ETF (“MOTG”) may be subject to risks which include, among others, investing in equity securities, consumer staples, health care, industrials, financials and information technology sectors, medium-capitalization companies, foreign securities, foreign currency, special risk considerations of investing in European issuers, depositary receipts, market, operational, high portfolio turnover, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, and concentration risks, which may make these investments volatile in price or difficult to trade. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns.
An investment in the VanEck Morningstar ESG Moat ETF (“MOTE”) may be subject to risks which include, among others, ESG investing strategy risks, investing in equity securities, consumer discretionary, financials, industrials and information technology sectors, medium-capitalization companies, market, operational, high portfolio turnover, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversification and concentration risks, which may make these investments volatile in price or difficult to trade. Medium-capitalization companies may be subject to elevated risks.
The Fund’s ESG strategy could cause it to perform differently compared to funds that do not have an ESG focus. The Fund’s ESG strategy may result in the Fund investing in securities or industry sectors that underperform other securities or underperform the market as a whole. The companies included in the US Sustainability Moat Focus Index may differ from companies included in other indices that use similar ESG screens. The Fund is also subject to the risk that the companies identified by the Index provider do not operate as expected when addressing ESG issues. Additionally, the Index provider’s proprietary valuation model may not perform as intended, which may adversely affect an investment in the Fund. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the Fund’s ability to invest in accordance with its ESG strategy.
ESG investing is qualitative and subjective by nature, and there is no guarantee that the factors utilized by VanEck or any judgment exercised by VanEck will reflect the opinions of any particular investor. Information regarding responsible practices is obtained through voluntary or third-party reporting, which may not be accurate or complete, and VanEck is dependent on such information to evaluate a company’s commitment to, or implementation of, responsible practices. Socially responsible norms differ by region. There is no assurance that the socially responsible investing strategy and techniques employed will be successful. An investment strategy may hold securities of issuers that are not aligned with ESG principles.
You can lose money by investing in the VanEck Morningstar Wide Moat Fund. Any investment in the Fund should be part of an overall investment program rather than a complete program. An investment in the Fund may be subject to risks which include, among others, concentration, equity securities, index tracking and data, consumer staples sector, health care sector, industrials sector, information technology sector, investing in the underlying fund, market, medium-capitalization companies, non-diversification, operational, portfolio turnover and replication management risks, all of which may adversely affect the Fund. Medium-capitalization companies may be subject to elevated risks. The Fund's assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
©️ Van Eck Securities Corporation, Distributor, a wholly owned subsidiary of Van Eck Associates Corporation.
Related Topics
Related Insights
April 10, 2024
Related Funds
DISCLOSURE
This content is intended for educational purposes only. Please note that the availability of the products mentioned may vary by country, and it is recommended to check with your local stock exchange.
Bristol-Myers Squibb is 1.22% of net assets of the VanEck Morningstar Wide Moat ETF (MOAT) as of 1/8/2024.
Lithia Motors Inc is 1.33% of net assets of the VanEck Morningstar SMID Moat ETF (SMOT) as of 1/8/2024.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. 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. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the speaker(s), but not necessarily those of VanEck or its other employees.
An investment in the VanEck Morningstar Wide Moat ETF (“MOAT”) may be subject to risks which include, among others, investing in equity securities, consumer discretionary, consumer staples, health care, industrials and information technology sectors, medium-capitalization companies, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversification and concentration risks, which may make these investments volatile in price or difficult to trade. Medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Morningstar SMID Moat ETF (“SMOT”) may be subject to risks which include, among others, equity securities, small- and medium-capitalization companies, consumer discretionary sector, financials sector, health care sector, industrials sector, information technology sector, market, operational, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and concentration risks, all of which may adversely affect the Fund. Small- and medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Morningstar International Moat ETF (“MOTI”) may be subject to risks which include, among others, in equity securities, communication services, consumer discretionary, financials, industrials and health care sectors, medium-capitalization companies, foreign securities, foreign currency, special risk considerations of investing in Asian, Chinese, European United Kingdom and emerging market issuers, depositary receipts, cash transactions, market, operational, high portfolio turnover, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversification and concentration risks, which may make these investments volatile in price or difficult to trade. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Morningstar Global Wide Moat ETF (“MOTG”) may be subject to risks which include, among others, investing in equity securities, consumer staples, health care, industrials, financials and information technology sectors, medium-capitalization companies, foreign securities, foreign currency, special risk considerations of investing in European issuers, depositary receipts, market, operational, high portfolio turnover, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, and concentration risks, which may make these investments volatile in price or difficult to trade. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns.
An investment in the VanEck Morningstar ESG Moat ETF (“MOTE”) may be subject to risks which include, among others, ESG investing strategy risks, investing in equity securities, consumer discretionary, financials, industrials and information technology sectors, medium-capitalization companies, market, operational, high portfolio turnover, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversification and concentration risks, which may make these investments volatile in price or difficult to trade. Medium-capitalization companies may be subject to elevated risks.
The Fund’s ESG strategy could cause it to perform differently compared to funds that do not have an ESG focus. The Fund’s ESG strategy may result in the Fund investing in securities or industry sectors that underperform other securities or underperform the market as a whole. The companies included in the US Sustainability Moat Focus Index may differ from companies included in other indices that use similar ESG screens. The Fund is also subject to the risk that the companies identified by the Index provider do not operate as expected when addressing ESG issues. Additionally, the Index provider’s proprietary valuation model may not perform as intended, which may adversely affect an investment in the Fund. Regulatory changes or interpretations regarding the definitions and/or use of ESG criteria could have a material adverse effect on the Fund’s ability to invest in accordance with its ESG strategy.
ESG investing is qualitative and subjective by nature, and there is no guarantee that the factors utilized by VanEck or any judgment exercised by VanEck will reflect the opinions of any particular investor. Information regarding responsible practices is obtained through voluntary or third-party reporting, which may not be accurate or complete, and VanEck is dependent on such information to evaluate a company’s commitment to, or implementation of, responsible practices. Socially responsible norms differ by region. There is no assurance that the socially responsible investing strategy and techniques employed will be successful. An investment strategy may hold securities of issuers that are not aligned with ESG principles.
You can lose money by investing in the VanEck Morningstar Wide Moat Fund. Any investment in the Fund should be part of an overall investment program rather than a complete program. An investment in the Fund may be subject to risks which include, among others, concentration, equity securities, index tracking and data, consumer staples sector, health care sector, industrials sector, information technology sector, investing in the underlying fund, market, medium-capitalization companies, non-diversification, operational, portfolio turnover and replication management risks, all of which may adversely affect the Fund. Medium-capitalization companies may be subject to elevated risks. The Fund's assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
©️ Van Eck Securities Corporation, Distributor, a wholly owned subsidiary of Van Eck Associates Corporation.