Choose Your Moat Style: Growth or Value
March 28, 2024
Read Time 3 MIN
Clients asked. We delivered. We are thrilled to now offer the VanEck Morningstar Wide Moat Growth ETF (MGRO) and VanEck Morningstar Wide Moat Value ETF (MVAL). These two new ETFs are built on the foundation of our flagship VanEck Morningstar Wide Moat ETF (MOAT). Since MOAT’s launch in 2012, much of its success and appeal has come from its focus on valuations when selecting among US wide moat companies each quarter. As a result, the MOAT portfolio is dynamic, allowing valuation opportunities to influence its ever-changing sector and style exposure. Based on the feedback we’ve received from MOAT investors, we recognize there is a desire to apply this proven moat investment philosophy to strategies with a consistent style exposure.
MGRO and MVAL allow investors to access Morningstar’s forward-looking equity research that identifies quality companies trading at attractive valuations and express their views on growth versus value in the US market.
Same Philosophy, New Styles
These new moat style strategies have the same DNA as our flagship MOAT ETF. They target quality US companies that Morningstar analysts assign a wide economic moat rating and are also among the most attractively priced relative to their Morningstar fair value estimate.
The two key differences between the new strategies and MOAT come in the form of a consistent style exposure and a slightly more concentrated portfolio size, think 35-45 stocks for MGRO and MVAL versus 45-55 stocks for MOAT.
MGRO and MVAL seek to track the Morningstar® US Broad Growth Wide Moat Focus IndexSM and the Morningstar® US Broad Value Wide Moat Focus IndexSM, both of which leverage Morningstar’s long-standing style methodology that fuels their well-recognized Style Box classification system. Each index targets its respective style exposure by selecting companies from the targeted style category as well as blend stocks with characteristics of both growth and value. The Indexes then tilt weightings to favor those stocks with the purest targeted style characteristics. The result is consistent style exposure.
MVAL | VanEck Morningstar Wide Moat Value ETF
Moat Value and Growth Historical Style Trail | Nov. 2022 – Feb. 2024
Source: Morningstar. As of 2/29/2024. Size of circles increase from start date to end date. Past performance is no guarantee of future results. Index performance is not representative of fund performance. It is not possible to invest directly in an index.
Differentiated Style Exposure
Like MOAT, our new style moat ETFs will offer investors differentiated exposure. We expect MGRO and MVAL to hold unique companies and feature varying sector exposure relative to many common style indexes in the market as well as actively managed strategies.
Growth strategies tend to be dominated by mega-cap tech-oriented companies like Microsoft, Apple, Nvidia, Amazon, Meta and Alphabet. MGRO’s index is expected to feature a structural underweight to these companies based on its weighting scheme and focus on attractive valuations.
Both ETFs will allow investors to gain exposure to value and growth stocks without adding to certain exposures that are likely already significant across their portfolios.
MGRO | VanEck Morningstar Wide Moat Growth ETF
Low Overlap Among Top Growth Index Holdings
| MGRO’s Index | |
| Name | Ticker |
| Veeva Systems | VEEV |
| Amazon.com | AMZN |
| Autodesk | ADSK |
| Fortinet | FTNT |
| Salesforce | CRM |
| Equifax | EFX |
| Agilent Technologies | A |
| Estee Lauder Cos | EL |
| Tyler Technologies | TYL |
| Russell 1000 Growth Index | |
| Name | Ticker |
| Microsoft | MSFT |
| Apple | AAPL |
| Nvidia | NVDA |
| Amazon.com | AMZN |
| Alphabet A | GOOGL |
| Alphabet C | GOOG |
| Eli Lilly & Co | LLY |
| Broadcom | AVGO |
| Tesla | TSLA |
Source: Morningstar and FTSE Russell. MGRO’s Index as of 3/20/2024. Russell 1000 Growth Index as of 2/29/2024. Shaded cells represent common top holdings. Past performance is no guarantee of future results. Index performance is not representative of fund performance. It is not possible to invest directly in an index.
No Overlap Among Top Value Index Holdings
| MVAL’s Index | |
| Name | Ticker |
| Masco Corporation | MAS |
| Int’l Flavors & Fragrances | IFF |
| RTX Corp | RTX |
| Charles Schwab | SCHW |
| Altria Group | MO |
| U.S. Bancorp | USB |
| Zimmer Biomet | ZBH |
| Comcast Corp | CMCSA |
| Medtronic | MDT |
| Russell 1000 Value Index | |
| Name | Ticker |
| Berkshire Hathaway | BRK.B |
| JPMorgan Chase | JPM |
| Exxon Mobil | XOM |
| Johnson & Johnson | JNJ |
| Proctor & Gamble | PG |
| Merck & Co | MRK |
| Chevron Corp | CVX |
| Bank of America | BAC |
| The Walt Disney Co | DIS |
Source: Morningstar and FTSE Russell. MVAL’s Index as of 3/20/2024. Russell 1000 Value Index as of 2/29/2024. Shaded cells represent common top holdings. Past performance is no guarantee of future results. Index performance is not representative of fund performance. It is not possible to invest directly in an index.
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Important Disclosures
Source for all data unless otherwise noted: Morningstar.
Fair value estimate: the Morningstar analyst's estimate of what a stock is worth. Price/Fair Value: ratio of a stock's trading price to its fair value estimate.
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 author(s), but not necessarily those of VanEck or its other employees.
Holdings will vary for the MGRO ETF and its corresponding Index. For a complete list of holdings in the ETF, please click here: MGRO - VanEck Morningstar Wide Moat Growth ETF - Holdings
Holdings will vary for the MVAL ETF and its corresponding Index. For a complete list of holdings in the ETF, please click here: MVAL - VanEck Morningstar Wide Moat Value ETF - Holdings
An investor cannot invest directly in an index. Returns reflect past performance and do not guarantee future results. Results reflect the reinvestment of dividends and capital gains, if any. Certain indices may take into account withholding taxes. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.
The Morningstar® Wide Moat Focus IndexSM was created and is maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck Morningstar Wide Moat ETF and bears no liability with respect to the ETF or any security. Morningstar® is a registered trademark of Morningstar, Inc. Morningstar® Wide Moat Focus IndexSM is a service mark of Morningstar, Inc.
The Morningstar® US Broad Value Wide Moat Focus IndexSM and Morningstar® US Broad Growth Wide Moat Focus IndexSM were created and are maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck Morningstar Wide Moat Value ETF and VanEck Morningstar Wide Moat Growth ETF and bears no liability with respect to the Funds or any security. Morningstar® is a registered trademark of Morningstar, Inc. Morningstar® US Broad Value Wide Moat Focus IndexSM and Morningstar® US Broad Growth Wide Moat Focus IndexSM are service marks of Morningstar, Inc.
The Morningstar® Wide Moat Focus IndexSM Intended to track the overall performance of attractively priced companies with sustainable competitive advantages according to Morningstar's equity research team.
Morningstar® US Broad Value Wide Moat Focus IndexSM: consists of at least 30 U.S. value-oriented companies identified as having sustainable, competitive advantages, and whose stocks are the most attractively priced, according to Morningstar.
Morningstar® US Broad Growth Wide Moat Focus IndexSM: consists of at least 30 U.S. growth-oriented companies identified as having sustainable, competitive advantages, and whose stocks are the most attractively priced, according to Morningstar.
Russel 1000 Value Index consists of value-oriented US companies selected from the large-cap focused Russell 1000 Index.
Russel 1000 Growth Index consists of growth-oriented US companies selected from the large-cap focused Russell 1000 Index.
An investment in the VanEck Morningstar Wide Moat ETF (MOAT®) may be subject to risks which include, among others, risks related to investing in equity securities, health care sector, industrials sector, information technology sector, financials sector, medium-capitalization companies, 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 index-related concentration risks, all of which may adversely affect the Fund. Medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Morningstar Wide Moat Value ETF (MVAL) may be subject to risks which include, among others, risks related to investing in equity securities, value style investing, financials sector, health care sector, industrials sector, large- and medium-capitalization companies, market, operational, index tracking, authorized participant concentration, new fund, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and index-related concentration risks, all of which may adversely affect the Fund. Large- and medium-capitalization companies may be subject to elevated risks. The Fund’s value strategy may result in the Fund investing in securities or industry sectors that underperform the market as a whole. Furthermore, the value companies identified by the Index provider may not operate as expected, and there is no guarantee that the index provider’s proprietary valuation model will perform as intended.
An investment in the VanEck Morningstar Wide Moat Growth ETF (MGRO) may be subject to risks which include, among others, risks related to investing in equity securities, growth style investing, consumer discretionary sector, industrials sector, financials sector, large- and medium-capitalization companies, health care sector, information technology sector, market, operational, index tracking, authorized participant concentration, new fund, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and index-related concentration risk, all of which may adversely affect the Fund. Large- and medium-capitalization companies may be subject to elevated risks. The Fund’s growth strategy may result in the Fund investing in securities or industry sectors that underperform the market as a whole. Furthermore, the growth companies identified by the Index provider may not operate as expected, and there is no guarantee that the index provider’s proprietary valuation model will perform as intended.
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 Funds
Important Disclosures
Source for all data unless otherwise noted: Morningstar.
Fair value estimate: the Morningstar analyst's estimate of what a stock is worth. Price/Fair Value: ratio of a stock's trading price to its fair value estimate.
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 author(s), but not necessarily those of VanEck or its other employees.
Holdings will vary for the MGRO ETF and its corresponding Index. For a complete list of holdings in the ETF, please click here: MGRO - VanEck Morningstar Wide Moat Growth ETF - Holdings
Holdings will vary for the MVAL ETF and its corresponding Index. For a complete list of holdings in the ETF, please click here: MVAL - VanEck Morningstar Wide Moat Value ETF - Holdings
An investor cannot invest directly in an index. Returns reflect past performance and do not guarantee future results. Results reflect the reinvestment of dividends and capital gains, if any. Certain indices may take into account withholding taxes. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.
The Morningstar® Wide Moat Focus IndexSM was created and is maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck Morningstar Wide Moat ETF and bears no liability with respect to the ETF or any security. Morningstar® is a registered trademark of Morningstar, Inc. Morningstar® Wide Moat Focus IndexSM is a service mark of Morningstar, Inc.
The Morningstar® US Broad Value Wide Moat Focus IndexSM and Morningstar® US Broad Growth Wide Moat Focus IndexSM were created and are maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck Morningstar Wide Moat Value ETF and VanEck Morningstar Wide Moat Growth ETF and bears no liability with respect to the Funds or any security. Morningstar® is a registered trademark of Morningstar, Inc. Morningstar® US Broad Value Wide Moat Focus IndexSM and Morningstar® US Broad Growth Wide Moat Focus IndexSM are service marks of Morningstar, Inc.
The Morningstar® Wide Moat Focus IndexSM Intended to track the overall performance of attractively priced companies with sustainable competitive advantages according to Morningstar's equity research team.
Morningstar® US Broad Value Wide Moat Focus IndexSM: consists of at least 30 U.S. value-oriented companies identified as having sustainable, competitive advantages, and whose stocks are the most attractively priced, according to Morningstar.
Morningstar® US Broad Growth Wide Moat Focus IndexSM: consists of at least 30 U.S. growth-oriented companies identified as having sustainable, competitive advantages, and whose stocks are the most attractively priced, according to Morningstar.
Russel 1000 Value Index consists of value-oriented US companies selected from the large-cap focused Russell 1000 Index.
Russel 1000 Growth Index consists of growth-oriented US companies selected from the large-cap focused Russell 1000 Index.
An investment in the VanEck Morningstar Wide Moat ETF (MOAT®) may be subject to risks which include, among others, risks related to investing in equity securities, health care sector, industrials sector, information technology sector, financials sector, medium-capitalization companies, 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 index-related concentration risks, all of which may adversely affect the Fund. Medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck Morningstar Wide Moat Value ETF (MVAL) may be subject to risks which include, among others, risks related to investing in equity securities, value style investing, financials sector, health care sector, industrials sector, large- and medium-capitalization companies, market, operational, index tracking, authorized participant concentration, new fund, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and index-related concentration risks, all of which may adversely affect the Fund. Large- and medium-capitalization companies may be subject to elevated risks. The Fund’s value strategy may result in the Fund investing in securities or industry sectors that underperform the market as a whole. Furthermore, the value companies identified by the Index provider may not operate as expected, and there is no guarantee that the index provider’s proprietary valuation model will perform as intended.
An investment in the VanEck Morningstar Wide Moat Growth ETF (MGRO) may be subject to risks which include, among others, risks related to investing in equity securities, growth style investing, consumer discretionary sector, industrials sector, financials sector, large- and medium-capitalization companies, health care sector, information technology sector, market, operational, index tracking, authorized participant concentration, new fund, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified, and index-related concentration risk, all of which may adversely affect the Fund. Large- and medium-capitalization companies may be subject to elevated risks. The Fund’s growth strategy may result in the Fund investing in securities or industry sectors that underperform the market as a whole. Furthermore, the growth companies identified by the Index provider may not operate as expected, and there is no guarantee that the index provider’s proprietary valuation model will perform as intended.
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.