What is Moat investing?

It is a concept of investing in companies that have sustainable competitive adventages over their peers and are trading at attractive valuations. These factors postion the company to generate superior returns to the broader market.

What competitive advantages does MOAT account for?

There are five sources of economic MOATs identified by Morningstar which are reflected in our MOAT ETF, Switiching Costs, Intangiable Assets, Network Effect, Cost Advantage and Efficient Scale.

Moat ETF

Companies with Long-term Competitive Advantages

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Discover VanEck’s Moat ETF Suite

The ETFs are based on a simple concept: Invest in companies with sustainable competitive advantages normally trading at attractive valuations. Over time, these companies seem well positioned to generate superior returns than the broader market. Morningstar’s forward-looking equity research turns the moat philosophy into an actionable investment strategy. This strategy is accessible through four ETFs from VanEck and could be considered for a US or global equity allocation.

VanEck Morningstar US Wide Moat UCITS ETF

Exposure: U.S. Moat Stocks
Sector and style agnostic strategy that identifies undervalued US stock according to Morningstar analysts
Equal weighted approach to enforce diversification
Please be aware of risks, including the risk of investing in US stocks

ETF Details

Basis-Ticker: MOTU
ISIN: IE0007I99HX7

TER: 0.46%
AUM: $50.9 M (as of 20-11-2024)
SFDR Classification: Article 6

VanEck Morningstar US Sustainable Wide Moat UCITS ETF

Exposure: U.S. Moat Stocks
Sector agnostic strategy that identifies valuation opportunities across the market
Avoids concentration on few megacaps
ESG screening applied
Please be aware of risks, including the risk of investing in US stocks

ETF Details

Basis-Ticker: MOAT
ISIN: IE00BQQP9H09

TER: 0.49%
AUM: $491.8 M (as of 20-11-2024)
SFDR Classification: Article 8

VanEck Morningstar US SMID Moat UCITS ETF

Exposure: U.S. Moat Stocks
Sector and style agnostic strategy focusing on Small and Mid-cap stocks
Attractively valued stocks by Morningstar with competitive advantages
Please be aware of risks, including the risk of investing smaller companies

ETF Details

Basis-Ticker: SMOT
ISIN: IE000SBU19F7

TER: 0.49%
AUM: $10.4 M (as of 20-11-2024)
SFDR Classification: Article 6

VanEck Morningstar Global Wide Moat UCITS ETF

Exposure: Global Moat Stocks
Rules-based picks across global markets, based on valuation opportunities
Includes both developed and emerging markets
Please be aware of risks, including the risk of investing in equities

ETF Details

Basis-Ticker: GOAT
ISIN: IE00BL0BMZ89

TER: 0.52%
AUM: $73.9 M (as of 20-11-2024)
SFDR Classification: Article 6

Sources of Economic Moats Found in Our Moat ETFs

Economic moats are sustainable competitive advantages that are expected to allow companies to fend off competition and sustain profitability into the future. Morningstar has identified five sources of economic moats, reflected in this Fund.

Switching Costs

Intangible Assets

Network Effect

Cost Advantage

Efficient Scale

The Philosophy Behind the Strategy

The moat investing philosophy, powered by Morningstar’s equity research, brings together its Economic Moat Rating and its forward-looking Fair Value Estimate. The combination of these two elements drives the choice of the companies included in the VanEck's Moat ETF.

Proven Long-Term Outperformance of Moat ETF

Global Exposure
U.S. Exposure
U.S. ESG Screened Exposure
U.S. Small-Mid Cap Exposure

Applying Morningstar’s moat investing philosophy to global companies has historically generated excess returns relative to the broad global equity markets. Strong stock selection has been a primary driver of excess returns since 2018 for this long-term, core investment strategy.

Source: Morningstar.

Applying Morningstar’s moat investing philosophy to U.S. companies has historically generated excess returns relative to the broad U.S. equity markets.

Source: Morningstar.

U.S. Wide Moat stocks rigorously screened to reduced Sustainability risk using the data from Sustainalytics and historically generating outperformance to the broad U.S. equity markets.

Source: Morningstar.

A focused approach to SMID (Small-Mid) cap U.S. equity investing based on a simple concept of accessing companies with long-term competitive advantages trading at attractive valuations.

Source: Morningstar.

Morningstar Analyst Team

Morningstar’s equity research team of more than 100 analysts covers over 1,500 companies globally. More than 200 asset managers and 75,000 financial advisors rely on Morningstar’s research. All of Morningstar’s equity analysts follow a single, consistent research methodology that has been rigorously applied to determine which companies to include in VanEck's Moat ETFs.

Fundamental Analysis
Economic Moat Rating
Company Valuation
Fair Value Estimate

Fundamental Analysis

Analyst conducts company and industry research, which may include financial statement analysis, trade show visits, industry reports, site visits and conference calls.

Economic Moat Rating

Analyst assesses the strength of the company’s competitive advantage, or moat, assigning a rating of None, Narrow, or Wide.

Company Valuation

Analyst considers past financial results, competitive position, and future prospects to forecast the company’s cash flows. Assumptions are entered into proprietary discounted cash flow model.

Fair Value Estimate

Using Morningstar’s proprietary discounted cash flow model, the analyst develops a Fair Value Estimate, which represents the intrinsic value of that company.

Main Risk Factors of a Moat ETF

Limited Diversification Concentration Risk
Equity Market Risk
Foreign Currency Risk
Risk of Investing in Smaller Companies

The Fund may invest a relatively high percentage of its assets in a smaller number of issuers or may invest a larger proportion of its assets in a single issuer. As a result, the gains and losses on a single investment may have a greater impact on the Fund's Net Asset Value and may make the Fund more volatile than more diversified funds.

The prices of the securities in the Fund are subject to the risks associated with investing in the securities market, including general economic conditions and sudden and unpredictable drops in value. An investment in the Fund may lose money.

Because all or a portion of the Fund are being invested in securities denominated in foreign currencies, the Fund’s exposure to foreign currencies and changes in the value of foreign currencies versus the base currency may result in reduced returns for the Fund, and the value of certain foreign currencies may be subject to a high degree of fluctuation.

The securities of smaller companies may be more volatile and less liquid than the securities of large companies. Smaller companies, when compared with larger companies, may have a shorter history of operations, fewer financial resources, less competitive strength, may have a less diversified product line, may be more susceptible to market pressure and may have a smaller market for their securities.

Please contact us for more information:

VanEck Netherlands, Amsterdam
Phone: +31 (0)20 719 51 00
Email: nlinfo@vaneck.com