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Moat Index’s Long-term Track Record Persists Despite Blip

26 February 2021

Read Time 1 MIN

 

The Morningstar Wide Moat Focus Index (“Moat Index”) ended its four-year streak of outperforming the broad U.S. equity market (as represented by the Morningstar US Market Index) in 2020—returning 15.1% vs 20.9%, respectively. Despite this, the Moat Index’s long-term track record remains impressive.

A recent Morningstar Equity Research report dissects the Moat Index’s 2020 performance and contextualizes these results as the strategy approaches a 14-year live track record. Topics include:

  • The compelling long-term track record of the Moat Index over nearly 14 years, including its risk-adjusted return metrics as well as the correlation between holding period length and batting average.1
  • How the Moat Index approaches FANMAG (Facebook, Amazon, Netflix, Microsoft, Apple, and Google/Alphabet) stocks and why being underweight in 2020 was a primary headwind that led to underperformance relative to the broad market.
  • The Moat Index’s heavy skew towards value stocks at the expense of growth stocks.
  • Stock selection as a headwind while sector positioning contributed to performance.

Read the full report: Morningstar Wide Moat Focus Index: Year in Review.

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The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. 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 are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Any opinions, projections, forecasts, and forward-looking statements presented herein are valid as of the date of this communication and are subject to change without notice. The information herein represents the opinion of the author(s), but not necessarily those of VanEck.

The views contained herein are not to be taken as advice or a recommendation to buy or sell any investment in any jurisdiction, nor is it a commitment from Van Eck Associates Corporation or its subsidiaries to participate in any transactions in any companies mentioned herein. This content is published in the United States. Investors are subject to securities and tax regulations within their applicable jurisdictions that are not addressed herein.

All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.