June Gains Extend Moats’ YTD Strength(1)
U.S. moat stocks were the shining stars in June, but international moats can’t be overlooked as both markets have posted strong relative performance through the first half of the year.
For the Month Ending June 30, 2017
Performance Overview
June was a strong month for moat investors. Both moat-focused indices outperformed their respective broad market indices, and finished the first half of the year ahead by more than 4 percentage points. The U.S.-oriented Morningstar® Wide Moat Focus IndexSM (MWMFTR, or "U.S. Moat Index") posted strong relative returns versus the S&P 500® Index in June (2.87% vs. 0.62%) extending its outperformance for the year-to-date period (13.86% versus 9.34%). International moat stocks, as represented by the Morningstar® Global ex-US Moat Focus IndexSM (MGEUMFUN, or "International Moat Index"), modestly ouperformed the MSCI All Country World Index ex USA in June (0.35% versus 0.31%) and maintained its performance advantage for year-to-date period (18.48% vs. 14.10%).
U.S. Domestic Moats: Value Realized in Healthcare
A diverse set of companies contributed to the U.S. Moat Index's impressive month. As the largest sector in the U.S. Moat Index, healthcare was the top contributor. Led by Amgen, Inc. (AMGN US, +10.94%) and Gilead Sciences, Inc. (GILD US, +9.95%) the sector had strong performers from various sub-industries and all 16 constituents from the sector posted positive returns in June. State Street Corporation (STT US, +10.62%) was the standout from the financial sector as banks benefited from positive stress test results. Recreational vehicle producer Polaris Industries, Inc. (PII US, +10.32%) also boosted U.S. Moat Index returns in June. By contrast, several U.S. Moat Index constituents struggled during the month. Industrials companies Stericycle, Inc. (SRCL US, -6.67%), General Electric Co. (GE US, -6.22%), and C.H. Robinson Worldwide, Inc. (CHRW US, -2.03%) all detracted from performance. Starbucks (SBUX US, -8.33%) was the worst performing constituent in June as investors soured on the company.
International Moats: Positives and Negatives Come to Stalemate
ENN Energy Holdings Ltd. (2688 HK, +17.03%) was the standout constituent in the International Moat Index. The privately owned natural gas distribution company recovered following a May sell-off that Morningstar analysts believed was overdone following speculation of a potential China government imposed annual cap on natural gas distributor growth rates. Although ENN Energy Holdings Ltd. and China Resources Gas Group Ltd. (1193 HK, +9.81%) were the only two utilities firms in the International Moat Index, the sector was the top contributor to returns in a relatively flat month. Financials also performed well, but weak performance from consumer discretionary and telecommunication services companies kept the Index's total returns in check. Moat companies from Mexico posted impressive returns but their small weighting in the Index wasn't enough to overcome negative returns broadly from India, France, and China.
(%) Month Ending 6/30/17
Morningstar
Wide Moat Focus Index (MWMFTR)
Constituent | Ticker | Total Return |
---|---|---|
Amgen Inc. | AMGN US | 10.94 |
State Street Corporation | STT US | 10.62 |
Polaris Industries Inc. | PII US | 10.32 |
Gilead Sciences, Inc. | GILD US | 9.95 |
Biogen Inc. | BIIB US | 9.52 |
Constituent | Ticker | Total Return |
---|---|---|
salesforce.com, inc. | CRM US | -3.39 |
General Electric Company | GE US | -6.22 |
Stericycle, Inc. | SRCL US | -6.67 |
Mondelez International, Inc. Class A | MDLZ US | -6.90 |
Starbucks Corporation | SBUX US | -8.33 |
View MOAT's current constituents
Morningstar
Global ex-US Moat Focus Index (MGEUMFUN)
Constituent | Ticker | Total Return |
---|---|---|
ENN Energy Holdings Limited | 2688 HK | 17.03 |
Cemex SAB de CV Cert Part Ord Repr 2 ShsA & 1 ShsB | CEMEXCPO MM | 14.24 |
IOOF Holdings Ltd | IFL AU | 11.57 |
Ramsay Health Care Limited | RHC AU | 10.02 |
CSL Limited | CSL AU | 10.00 |
Constituent | Ticker | Total Return |
---|---|---|
SFR Group SA | NUM FP | -6.57 |
Orange SA | ORA FP | -7.53 |
Genting Singapore Plc | GENS SP | -7.61 |
Tata Motors Limited | TTMT IN | -9.34 |
Baytex Energy Corp. | BTE CN | -16.64 |
View MOTI's current constituents
As of 6/16/17
Morningstar
Wide Moat Focus Index (MWMFTR)
Added Constituent | Ticker |
---|---|
L Brands Inc | LB US |
T Rowe Price Group Inc | TROW US |
CH Robinson Worldwide Inc | CHRW US |
General Electric Co | GE US |
BlackRock Inc | BLK US |
John Wiley & Sons Inc. A | JW/A US |
Deleted Constituent | Ticker |
---|---|
Mead Johnson Nutrition Co | MJN US |
Jones Lang Lasalle Inc | JLL US |
CBRE Group Inc. | CBG US |
Mastercard Inc A | MA US |
Varian Medical Systems Inc | VAR US |
Cerner Corp | CERN US |
View Latest MOAT Reconstitution Report
View MOAT's list of current constituents
Morningstar
Global ex-US Moat Focus Index (MGEUMFUN)
Added Constituent | Country |
---|---|
Roche Hldgs AG Ptg Genus | Switzerland |
Telefonica SA | Spain |
Bayer Motoren Werke AG (BMW) | Germany |
Potash Corp of Saskatchewan | Canada |
China Resources Gas Group Ltd. | China |
Canadian Imperial Bank of Commerce | Canada |
Westpac Banking Corp | Australia |
SFR Group | France |
Mobile TeleSystems PJSC | Russian Federation |
Wipro Ltd | India |
Koninklijke Philips Electronics NV | Netherlands |
Meggitt | United Kingdom |
Novartis AG Reg | Switzerland |
America Movil SAB de CV L | Mexico |
Murata Manufacturing Co Ltd | Japan |
DBS Group Holdings | Singapore |
HeidelbergCement AG | Germany |
Commonwealth Bank Australia | Australia |
National Bank of Canada | Canada |
Ansell Ltd | Australia |
Julius Baer Group | Switzerland |
Deleted Constituent | Country |
---|---|
Kao Corp | Japan |
Seven & I Holdings Co Ltd | Japan |
William Demant Hldg | Denmark |
Telstra Corp Ltd | Australia |
Carsales.com Ltd | Australia |
DuluxGroup Ltd | Australia |
Fisher & Paykel Healthcare Corporation Limited | New Zealand |
Swire Properties Ltd | Hong Kong |
Infosys Ltd | India |
Tata Consultancy Services Ltd | India |
Ramsay Health Care Ltd | Australia |
Airbus SE | France |
Singapore Exchange Ltd | Singapore |
GEA Group AG | Germany |
London Stock Exchange Plc | United Kingdom |
Vicinity Centres | Australia |
China Mobile Ltd. | China |
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. | Mexico |
Iluka Resources Ltd | Australia |
KDDI Corp | Japan |
View Latest MOTI Reconstitution Report
View MOTI's list of current constituents
Published: 09 August 2018