Global ‘Wide Moat' ETF Filed

July 10, 2018

VanEck is hoping to replicate the success it has had with the $1.4 billion VanEck Vectors Morningstar Wide Moat ETF (MOAT) by putting in registration a global-in-scope version of the U.S.-focused strategy.

The VanEck Vectors Morningstar Global Wide Moat ETF, like its sister fund, will track an index from Morningstar that targets companies with a sustainable competitive advantage that are also attractively priced. The key difference between the new fund in registration and the existing MOAT is a worldwide focus.

The underlying index uses the Morningstar Global Markets Index as its selection universe, screening out the 20% of companies that have the worst 12-month momentum. From there, it selects companies with the highest fair-value-to-price ratio based on Morningstar’s fair value estimates. The prospectus notes that the fund can include midcap companies in its portfolio.

The index is split into two sub-portfolios of 50 stocks each with the components within each equally weighted. Each subportfolio is rebalanced and reconstituted every six months, but in different quarters from each other. Every six months, both subportfolios are reweighted at 50% of the total portfolio, according to the filing. 

MOAT was launched in 2012 and is VanEck’s eighth largest fund.

Contact Heather Bell at [email protected]

 

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