ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Beyond Basic Beta Channel
  2. Quality, Value, and Other Perks Found in This ETF
Beyond Basic Beta Channel
Share

Quality, Value, and Other Perks Found in This ETF

Tom LydonMar 10, 2023
2023-03-10

In investing, quality and value are coveted traits and that’s amplified when the stock in question also qualifies as a wide moat name. Finding all three qualifications under one umbrella is no easy task.

However, some exchange traded funds ease that burden. That group includes the VanEck Morningstar Wide Moat ETF (MOAT B+) – the pioneer of wide moat investing via the ETF wrapper. The $7.3 billion MOAT follows the Morningstar® Wide Moat Focus Index, which is a basket of wide moat stocks exhibiting quality traits and attractive valuations.

While there’s considerable debate surrounding how to define quality as an investment factor, it’s not debatable that this style rewards investors over the long term, potentially enhancing the allure of strategies such as MOAT.

“The stocks of high-quality companies tend to have high profitability and strong balance sheets. Historically, Morningstar researchers say, higher-quality stocks perform better over time than less-profitable and more highly indebted counterparts. They also tend to protect against downturns and be less risky than lower-quality stocks,” wrote Morningstar analyst Lauren Solberg.

As noted above, MOAT follows the Morningstar® Wide Moat Focus Index. However, some of that benchmark’s components also reside in the Morningstar US Quality Factor Index, which is comprised of highly profitable firms with low debt ratios.

Alone, the overlap between MOAT and the quality index is good news for investors considering the VanEck ETF. But there’s more and the “more” includes some MOAT member firms currently residing in undervalued territory. That includes Facebook parent Meta Platforms (NASDAQ: META), MOAT’s largest holding at a weight of 3.27%.

“The growth in users and user engagement, along with the valuable data that they generate, makes Meta’s platforms attractive to advertisers. The combination of these valuable assets and our expectation that advertisers will continue to shift their spending online bodes well for the firm’s top-line growth and cash flow,” noted Morningstar analyst Ali Mogharabi.

Graphics software provider Adobe Inc. (NASDAQ: ADBE), which accounts for 2.52% of the MOAT roster, is another example of a high-quality name in the ETF that sports attractive valuations.

“For Adobe overall we assign a wide moat, arising from switching costs and network effects. Based on the company’s segments, we believe digital media has a wide moat from switching costs and network effects, digital experience has a narrow moat arising from switching costs, and publishing has a narrow moat from switching costs,” according to Morningstar’s Dan Romanoff.

Other MOAT components that are high-quality/low-valuation names are Google parent Alphabet (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT), and Veeva Systems (NASDAQ: VEEV).

For more news, information, and analysis, visit the Beyond Basic Beta Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X