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Should VanEck Morningstar Wide Moat ETF (MOAT) Be on Your Investing Radar?

If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the VanEck Morningstar Wide Moat ETF (MOAT), a passively managed exchange traded fund launched on 04/24/2012.

The fund is sponsored by Van Eck. It has amassed assets over $5.90 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Companies that find themselves in the large cap category typically 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

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.46%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 29.10% of the portfolio. Industrials and Healthcare round out the top three.

Looking at individual holdings, Kellogg Co (K) accounts for about 3.06% of total assets, followed by Polaris Inc (PII) and Veeva Systems Inc (VEEV).

The top 10 holdings account for about 27.06% 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 lost about -21.61% so far this year and is down about -16.98% in the last one year (as of 10/03/2022). In the past 52-week period, it has traded between $59.82 and $78.14.

The ETF has a beta of 1.01 and standard deviation of 24.50% for the trailing three-year period, making it a medium risk choice in the space. With about 51 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 sufficient 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 $267.27 billion in assets, SPDR S&P 500 ETF has $322.73 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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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VanEck Morningstar Wide Moat ETF (MOAT): ETF Research Reports
 
Kellogg Company (K): Free Stock Analysis Report
 
Polaris Inc. (PII): Free Stock Analysis Report
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
Veeva Systems Inc. (VEEV): Free Stock Analysis Report
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
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