Wide moats start strong in 2017
US wide moats boasted impressive performance during the first month of 2017.
The Morningstar® Wide Moat Focus IndexTM (Moat Index) is off to a strong start after outperforming the S&P 500® Index (-1.82% vs. -2.81%) in January continuing the strong relative performance trend it established in 2016.
Coal gravy train
Railroad operator CSX Corp (CSX US, +29.11%) surged in January on the heels of an improved coal market and outlook. CSX also received a boost from speculation that industry veteran Hunter Harrison, who recently resigned from Canadian Pacific, might take over CSX management duties. Morningstar raised CSX's fair value estimate in late January to equally reflect better pricing, particularly in the coal market and the time value of money.
From a sector perspective, consumer discretionary and information technology companies were the top contributors to the Moat Index performance, led by Twenty-First Century Fox (FOXA US, +11.91%) and salesforce.com, Inc. (CRM US, +15.54%). Healthcare was positive for the month within the index despite Bristol-Myers Squibb's (BMY US, -15.32%) decline following an announcement that it will not seek accelerated approval for its lung cancer treatment. Real estate was the only sector to detract from Moat Index performance in January.
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
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