Wide moats start strong in 2017


US wide moats boasted impressive performance during the first month of 2017.

Performance overview

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.


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