MOAT continues to outperform


 MOAT continued its impressive performance stretch, which began a year ago, by posting strong returns in February relative to the broad US equity market.

Performance Overview

The US equity Morningstar® Wide Moat Focus Index™ (MOAT Index) continued its strong start to the year by outperforming the S&P 500 Index (3.82% vs. 2.66%) in February.

More takeovers: Buy Buy Baby

It’s been a wild ride for pharmaceutical and biotech companies since last year’s US presidential election, but Morningstar’s economic moat and valuation research within both industries benefited the US Moat Index as several of the top drivers of performance came from within those industries.

Materials firm Compass Minerals International (CMP US, -8.47%) struggled for the month and was the leading detractor from US Moat Index performance. CMP US, a producer of road de-icing salt, was negative impacted by a notable drop in road salt prices.

Infant formula company Mead Johnson Nutrition Co. (MJN US, +24.60%) benefited from corporate action news shortly after being added to the US Moat Index in December. News of an intended acquisition of MJN US by narrow moat UK conglomerate Reckitt Benckiser Group (RB GB) boosted shares of the company in February. MJN US joins other recent constituents to benefit from acquisition activity:

  • LinkedIn Corp.

  • St. Jude Medical, Inc., and

  • Time Warner, Inc.

Source: VanEck, Morningstar.  Stock returns in US dollars all other returns in Australian dollars. Index returns are calculated to the last business day of the month and assume immediate reinvestment of all dividends and exclude costs associated with investing in MOAT. You cannot invest directly in an index. Past performance is not a reliable indicator of future performance of the indices or MOAT.
IMPORTANT NOTICE: Issued by VanEck Investments Limited ABN 22 146 596 116 AFSL 416755 (‘VanEck’). VanEck is a wholly owned subsidiary of Van Eck Associates Corporation based in New York, United States. VanEck Vectors ETF Trust ARBN 604 339 808 (the ‘Trust’) is the issuer of shares in the VanEck Vectors Morningstar Wide Moat ETF (‘US Fund’). The Trust and the US Fund are regulated by US laws which differ from Australian laws. Trading in the US Fund’s shares on ASX will be settled by CHESS Depositary Interests (‘CDIs’) which are also issued by the Trust. The Trust is organised in the State of Delaware, US. Liability of investors is limited. VanEck Associates serves as the investment adviser to the US Fund. VanEck, on behalf of the Trust, is the authorised intermediary for the offering of CDIs over the US Fund’s shares and issuer in respect of the CDIs and corresponding Fund’s shares traded on ASX.
Investment in the US Fund may be subject to risks that include, among others, fluctuations in value due to market and economic conditions or factors relating to specific issuers. Medium capitalisation companies may be subject to elevated risks. The US Fund’s assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors. The Morningstar® Wide Moat Focus Index™ was created and is maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the US Fund and bears no liability with respect to the US Fund or any security. Morningstar®, Morningstar Wide Moat Focus Index™ and Economic Moat ™ are trademarks of Morningstar, Inc. and have been licensed for use by VanEck.

Published: 09 August 2018