Moat Stocks React to Inflation and Slowing Growth
May 08, 2024
Read Time 6 MIN
April was a reset month for US equity markets, as investors digested persistent inflation data and declining GDP growth. It was the first negative month of the year, from a total return perspective, pausing what had been a consistent upward trajectory for US stocks to start the year. What did not change was the influence of a select few companies on returns. While Alphabet and Tesla were two of the few companies to contribute positively to S&P 500 Index returns, several of the “Magnificent 7” stocks led the market lower. Microsoft, Meta, Nvidia, and Amazon were four of the top five negative contributors to S&P 500 Index returns in April. This dynamic continues to make things difficult for differentiated, high active share strategies. This is especially true for those that aren’t typically focused on pockets of the market that have squeaked out success this year, such as energy stocks and subsets of the utilities and materials sectors.
The Morningstar Wide Moat Focus Index (the “Moat Index”) modestly lagged the S&P 500 Index in April, losing 4.96%. Driving this underperformance was stock selection, particularly from the health care and industrials sectors. For the year-to-date, it has been a story of stock selection across the board, both overweights and underweights. More on that below.
Down-market cap, smaller US companies suffered in April in the face of a higher-for-longer interest rate outlook. Higher rates mean potentially higher funding cost for smaller companies that may have less reliable cash flows than their larger peers. The Morningstar US Small-Mid Cap Moat Focus Index (the “SMID Moat Index”) performed mostly in line with the Russell 2500 Index, representing the SMID cap market as a whole.
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Smaller Caps Bear Brunt of Reset Month | As of 4/30/2024
Source: Morningstar. As of 4/30/2024. 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. Fund performance current to the most recent month end is available by visiting vaneck.com or by calling 800.826.2333.
Moat Index Highlights
Selection Drives Performance, Again
Stock selection has been the primary driver of relative performance since the Moat Index was launched in 2007. That continued in April and is the key driver of the short-term underperformance relative to the S&P 500 Index in 2024. The elephant in the room in 2024 is Nvidia. The Moat Index has not held Nvidia, which has been a notable headwind considering Nvidia alone has accounted for nearly 40% of the S&P 500 Index’s 2024 return thus far.
Health care companies Bristol-Myers Squibb (BMY) and Veeva Systems (VEEV) were notable underperformers in April. BMY shares suffered following mixed earnings results that were released near the end of the month. Despite the negative market sentiment, Morningstar maintained its $63 per share fair value estimate and believes the market is underestimating the strength of the firm’s next-generation drugs. Morningstar does acknowledge the magnitude of BMY’s patent cliff over the next five years. However, Morningstar believes the firm has enough new products to mitigate pressures from generics and maintains its wide economic moat rating.
VEEV, while in the health care sector, is very much a technology-oriented company. It is the leading provider of cloud-based software solutions specific to the life sciences industry, according to Morningstar. An unexpected departure of the company’s chief financial officer and principal financial officer was announced April 1, 2024, which drove market sentiment lower during the month. However, Morningstar believes the transition will not come with any significant operational disruptions and VEEV’s notable switching costs remain intact. VEEV shares currently trade at an approximately 25% discount to Morningstar’s fair value estimate.
Medtronic Downgrade
In late March, Morningstar stripped medical device manufacturer Medtronic PLC (MDT) of its wide economic moat rating. Moat rating downgrades from wide are rare and in the case of MDT’s, Morningstar’s concern is risk of material value destruction as opposed to deteriorating moat sources. Many medical device companies augment their internally developed innovation through M&A activities and MDT is no exception. However, their acquisition of Covidien has depressed returns on invested capital for a prolonged period, and Morningstar stands wary of additional value destruction risk through what is likely to be further industry consolidation. MDT is expected to work its way out of the Moat Index in the coming reviews.
Top Contributors and Detractors from Moat Index - April 2024
| Leading Contributors | ||||
| Company | Ticker | Sector | Avg. Weight (%) | Contribution (%) |
| Alphabet Inc | GOOGL | Communication Services | 2.68 | 0.21 |
| Tyler Technologies Inc | TYL | Information Technology | 2.38 | 0.20 |
| RTX Corp | RTX | Industrials | 2.61 | 0.11 |
| Campell Soup Co | CPB | Consumer Staples | 2.37 | 0.09 |
| Teradyne Inc | TER | Information Technology | 2.61 | 0.08 |
| Leading Detractors | ||||
| Company | Ticker | Sector | Avg. Weight (%) | Contribution (%) |
| Equifax Inc | EFX | Industrials | 2.52 | -0.45 |
| Bristol-Myers Squibb Co | BMY | Health Care | 2.39 | -0.43 |
| Veeva Systems Inc | VEEV | Health Care | 2.66 | -0.38 |
| Comcast Corp | CMCSA | Communication Services | 2.39 | -0.27 |
| Allegion PLC | ALLE | Industrials | 2.67 | -0.26 |
Source: Morningstar, April 2024. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein.
SMID Moat Index Highlights
The Good and the Bad Through a Difficult Environment
Following a strong performance month in March, SMID cap stocks finished well in negative territory in April, as the market digested inflation and growth data. Several stocks helped buoy returns for the SMID Moat Index during the period. Equitrans Midstream (ETRN) continued its strong performance following the announced acquisition by EQT in an all-stock transaction due to close in the fourth quarter of 2024. Morningstar sees the acquisition as a good deal for ETRN shareholders. Hasbro (HAS) also performed strongly in April after releasing impressive profitability figures toward the end of the month. The toy and game company completed its divestiture of eOne entertainment business, allowing profitability to swing significantly higher for the quarter. Morningstar maintained its $84 per share fair value estimate following the release and shares finished the month trading near a 25% discount according to Morningstar.
Trinet Group (TNET) was the leading detractor from SMID Moat Index returns in April. It provides outsourced payroll and human capital management services. Shares of TNET slid in late April after a challenging quarter in which higher insurance costs weighed on profitability. Despite the results, Morningstar maintained its $145 fair value estimate and narrow moat rating. CarMax (KMX) also negatively impacted SMID Moat Index returns as market sentiment soured after earnings were released in mid-April. Despite missing expectations for the quarter, Morningstar does not see CarMax as having a demand problem. Rather, it sees an issue of consumer affordability resulting from high interest rates on auto loans. Morningstar did reduce KMX’s fair value estimate from $135 per share to $125, but the company still trades at nearly a 50% discount to fair value.
Top Contributors and Detractors from SMID Moat Index - April 2024
| Leading Contributors | ||||
| Company | Ticker | Sector | Avg. Weight (%) | Contribution (%) |
| Equitrans Midstream | ETRN | Energy | 1.41 | 0.12 |
| Hasbro Inc | HAS | Consumer Discretionary | 0.71 | 0.07 |
| Zebra Technologies Corp | ZBRA | Information Technology | 1.38 | 0.06 |
| Tyler Technologies | TYL | Information Technology | 0.65 | 0.06 |
| Interactive Brokers Group | IBRK | Financials | 1.43 | 0.04 |
| Leading Detractors | ||||
| Company | Ticker | Sector | Avg. Weight (%) | Contribution (%) |
| Trinet Group | TNET | Industrials | 1.34 | -0.32 |
| CarMax Inc | KMX | Consumer Discretionary | 1.42 | -0.31 |
| Lyft Inc | LYFT | Industrials | 1.47 | -0.28 |
| Tapestry Inc | TPR | Consumer Discretionary | 1.48 | -0.24 |
| Brunswick Corp | BC | Consumer Discretionary | 1.36 | -0.22 |
Source: Morningstar, April 2024. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein.
Choose Your Moat Strategy
VanEck’s suite of moat investing strategies is powered by Morningstar’s equity research team, which seeks quality companies trading at attractive valuations. The below ETFs offer access to US moat companies:
VanEck Morningstar Wide Moat ETF (MOAT): companies with a wide moat rating, which means Morningstar believes the company is likely to sustain its competitive advantage for at least the next 20 years.
VanEck Morningstar SMID Moat ETF (SMOT): small and mid-cap moat companies.
VanEck Morningstar Wide Moat Growth ETF (MGRO): wide moat companies within Morningstar’s growth characteristics.
VanEck Morningstar Wide Moat Value ETF (MVAL): wide moat companies within Morningstar’s value characteristics.
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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 MOAT ETF and its corresponding Index. For a complete list of holdings in the ETF, please click here: MOAT - VanEck Morningstar Wide Moat ETF - Holdings.
Holdings will vary for the SMOT ETF and its corresponding Index. For a complete list of holdings in the ETF, please click here: SMOT - VanEck Morningstar SMID Moat ETF - Holdings.
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 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 and Morningstar® US Small-Mid Cap 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 ETF or the VanEck Morningstar SMID Moat ETF and bears no liability with respect to the ETFs or any security. Morningstar® is a registered trademark of Morningstar, Inc. Morningstar® Wide Moat Focus IndexSM and Morningstar® US Small-Mid Cap Moat Focus IndexSM are service marks 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.
Effective June 20, 2016, Morningstar implemented several changes to the Morningstar Wide Moat Focus Index construction rules. Among other changes, the index increased its constituent count from 20 stocks to at least 40 stocks and modified its rebalance and reconstitution methodology. These changes may result in more diversified exposure, lower turnover, and longer holding periods for index constituents than under the rules in effect prior to this date. Past performance is no guarantee of future results.
The Morningstar moat-driven indexes represent various regional exposures and consist of companies identified as having sustainable, competitive advantages and whose stocks are attractively priced, according to Morningstar.
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.
The Morningstar® US Small-Mid Cap Moat Focus IndexSM is intended to track the overall performance of small- and mid-cap companies with sustainable competitive advantages and attractive valuations 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.
The Russell 2500 Index represents small- and mid-cap US companies. The S&P 500 Index consists of 500 widely held common stocks covering industrial, utility, financial and transportation sector. The S&P 500 Equal Weighted Index which is an equally weighted version of the market-cap weighted S&P 500 Index.
The S&P 500® Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Van Eck Associates Corporation. Copyright © 2024 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spglobal.com/spdji/en/. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.
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 SMID Moat ETF (SMOT®) may be subject to risks which include, among others, risks related to investing in equity securities, small- and medium-capitalization companies, consumer discretionary sector, financials sector, health care sector, industrials sector, information technology sector, 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-diversified, and index-related 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 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.
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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 MOAT ETF and its corresponding Index. For a complete list of holdings in the ETF, please click here: MOAT - VanEck Morningstar Wide Moat ETF - Holdings.
Holdings will vary for the SMOT ETF and its corresponding Index. For a complete list of holdings in the ETF, please click here: SMOT - VanEck Morningstar SMID Moat ETF - Holdings.
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 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 and Morningstar® US Small-Mid Cap 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 ETF or the VanEck Morningstar SMID Moat ETF and bears no liability with respect to the ETFs or any security. Morningstar® is a registered trademark of Morningstar, Inc. Morningstar® Wide Moat Focus IndexSM and Morningstar® US Small-Mid Cap Moat Focus IndexSM are service marks 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.
Effective June 20, 2016, Morningstar implemented several changes to the Morningstar Wide Moat Focus Index construction rules. Among other changes, the index increased its constituent count from 20 stocks to at least 40 stocks and modified its rebalance and reconstitution methodology. These changes may result in more diversified exposure, lower turnover, and longer holding periods for index constituents than under the rules in effect prior to this date. Past performance is no guarantee of future results.
The Morningstar moat-driven indexes represent various regional exposures and consist of companies identified as having sustainable, competitive advantages and whose stocks are attractively priced, according to Morningstar.
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.
The Morningstar® US Small-Mid Cap Moat Focus IndexSM is intended to track the overall performance of small- and mid-cap companies with sustainable competitive advantages and attractive valuations 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.
The Russell 2500 Index represents small- and mid-cap US companies. The S&P 500 Index consists of 500 widely held common stocks covering industrial, utility, financial and transportation sector. The S&P 500 Equal Weighted Index which is an equally weighted version of the market-cap weighted S&P 500 Index.
The S&P 500® Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Van Eck Associates Corporation. Copyright © 2024 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spglobal.com/spdji/en/. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.
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 SMID Moat ETF (SMOT®) may be subject to risks which include, among others, risks related to investing in equity securities, small- and medium-capitalization companies, consumer discretionary sector, financials sector, health care sector, industrials sector, information technology sector, 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-diversified, and index-related 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 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.