Wide moats outperform in November


Many US equity wide moat companies flourished following the US presidential election resulting in the outperformance of Morningstar's Wide Moat Index.

Performance overview
The US equities Morningstar® Wide Moat Focus Index™  (MOAT Index) outpaced the S&P 500® Index (8.66% vs. 6.80%) in November as several constituents flourished in the days following the results of the US presidential election.
Year to date through 30 November, the MOAT Index has gained 19.90% versus 8.11% for the S&P 500 Index.

US wide moats: Trump Bumps some while others slump
The US elections impacted markets broadly and generally gave a boost to US equities while creating headwinds for global fixed income markets. The Trump victory benefitted specific US industries and sectors, including financials and infrastructure and this was reflected by the MOAT Index’s top performers for the month. 
Wide moat rated banks such as Wells Fargo & Co (WFC US, +15.98%1) and State Street Corporation (STT US, +12.23%1) were among the strongest performers in the MOAT Index in November. Railroad companies CSX Corp. (CSX US, +17.98%1) and Norfolk Southern Corp. (NSC US, +15.21%1) were also standouts. Both companies jumped the day after the election and continued to rise in the weeks following; Morningstar equity analysts raised their fair value for NSC US at the end of the month. 
On the flip side, the share price of several companies fell after the election results, particularly those that may be impacted by healthcare reform and international trade. Healthcare IT firm Cerner Corp (CERN US, -15.02%1) and global-trade dependent Visa Inc. (V US, -6.10%1) were among MOAT Index’s leading detractors.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)
MOAT tracks the Morningstar Wide Moat Focus Index and is a high conviction portfolio of at least 40 attractively priced US stocks that Morningstar considers have wide ‘economic moats™’, namely structural competitive advantages and high barriers to entry that ensure consistent earnings for 20+ years.

Source: VanEck, Morningstar.  All returns in Australian dollars unless otherwise noted. 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.
1 Returns in US dollars.
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This is general information only and not financial advice. It does not take into account any person’s individual objectives, financial situation or needs. Investing in international markets has specific risks that are in addition to the typical risks associated with investing in the Australian market. These include currency/foreign exchange fluctuations, ASX trading time differences and changes in foreign regulatory and tax regulations.  Before making an investment decision in relation to the US Fund you should read the PDS and with the assistance of a financial adviser consider if it is appropriate for your circumstances. The PDS is available at www.vaneck.com.au or by calling 1300 68 38 37. Past performance is not a reliable indicator of future performance. No member of the VanEck group of companies or the Trust gives any guarantee or assurance as to the repayment of capital, the payment of income, the performance or any particular rate of return from the US Fund.
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Published: 09 August 2018