Analyst Paul Weisbruch of Street One Financial today profiles a lesser-known Van Eck ETF that tracks a unique index of stocks known for having a “wide moat” in their respective industries.
ETF issuer Van Eck now has an expansive sixty-four ETP offerings in the U.S., led by the well-known “Gold Miners” products GDX (Van Eck Vectors Gold Miners, Expense Ratio 0.53%, $8.8 billion in AUM) and GDXJ (Van Eck Vectors Junior Gold Miners, Expense Ratio 0.57%, $3.5 billion in AUM).
The fund sponsor has five other ETF offerings that are also north of $1 billion in assets under management, but today we will focus on a growing ETF that is not quite an asset giant yet.
Having debuted in 2012, this fund is slowly benefitting from a wider level of recognition. Four-star Morningstar ranked MOAT (Van Eck Vectors Morningstar Wide Moat, Expense Ratio 0.49%) has gathered more than $852 million in assets to date, and it falls within the “All Cap Equity” category, competing with such behemoths like VTI (Vanguard Total Stock Market, Expense Ratio 0.05%, $70.5 billion in AUM), USMV (iShares Edge MSCI Minimum Volatility, Expense Ratio 0.15%), and SCHB (Schwab U.S. Broad Market, Expense Ratio 0.03%, $7.7 billion in AUM).
As mentioned, MOAT is not only currently ranked by Morningstar, but the fund itself tracks a Morningstar Index known as the “Wide Moat Index,” which according to fund literature “is intended to track the overall performance of attractively priced companies with sustainable competitive advantages according to Morningstar’s equity research team.”
Top holdings in MOAT currently are: 1) CSX (3.18%), 2) TIF (3.08%), 3) HOG (3.02%), 4) TWX (3.01%), and 5) STT (2.97%), and we see forty-three individual equity names within the portfolio. The sectors with the most representation are as follows: 1) Consumer Discretionary (25%), 2) Financial Services (23%), 3) Health Care (21%), 4) Industrials (15%), and 5) Technology (7%), followed by smaller exposures to other sectors.
Portfolio managers whom may be wondering what the symbol and terminology “MOAT” refers to can delve through fund literature where it is stated:
“Moat = Sustainable Competitive Advantage. Morningstar equity analysts use a time-tested proprietary process to determine if a company has an economic moat. Of the broad equity universe analyzed by Morningstar (referring to the “moat”) currently about 10% receive a wide moat categorization; at least 40 stocks with attractive valuations are selected for its Index. Index has generated significant excess returns relative to the overall market since inception.”
MOAT shares rose $0.25 (+0.70%) to $35.78 in Thursday afternoon trading. Year-to-date, MOAT has gained 23.76%, versus an 11.40% rise in the benchmark S&P 500 during the same period.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.