Launched on 04/24/2012, the VanEck Morningstar Wide Moat ETF (MOAT) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Van Eck. It has amassed assets over $15.89 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.47%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.76%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 24% of the portfolio. Healthcare and Information Technology round out the top three.
Looking at individual holdings, Transunion (TRU) accounts for about 2.81% of total assets, followed by Bristol-Myers Squibb Co (BMY) and Gilead Sciences Inc (GILD).
The top 10 holdings account for about 26.43% of total assets under management.
Performance and Risk
MOAT seeks to match the performance of the Morningstar Wide Moat Focus Index before fees and expenses. The Morningstar Wide Moat Focus Index tracks the overall performance of the 20 most attractively priced companies with sustainable competitive advantages.
The ETF has gained about 12.68% so far this year and it's up approximately 36.27% in the last one year (as of 10/30/2024). In the past 52-week period, it has traded between $72.16 and $97.63.
The ETF has a beta of 1.02 and standard deviation of 19.14% for the trailing three-year period, making it a medium risk choice in the space. With about 56 holdings, it effectively diversifies company-specific risk.
Alternatives
VanEck Morningstar Wide Moat ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, MOAT is a good option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $549.62 billion in assets, SPDR S&P 500 ETF has $603.82 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Get it free >>VanEck Morningstar Wide Moat ETF (MOAT): ETF Research Reports
Bristol Myers Squibb Company (BMY) : Free Stock Analysis Report
Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
TransUnion (TRU) : Free Stock Analysis Report
iShares Core S&P 500 ETF (IVV): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
