• Moat Investing

    Keeping Up with the Joneses

    Brandon Rakszawski, Senior ETF Product Manager
     

    For the Month Ending February 28, 2019

    The Morningstar® Wide Moat Focus IndexSM (MWMFTR, or "U.S. Moat Index") outpaced the broad U.S. equity markets as represented by the S&P 500 Index (3.66% vs. 3.21%) in February. Tech companies became a more prominent exposure in the U.S. Moat Index following the December index review, and the sector represented an outsized portion of the U.S. Moat Index’s return for the month, similar to the broad market. Consumer staples companies were also strong contributors for the month, and all sectors posted positive returns.

    Small Exposure Packs Big Punch

    The lone real estate company in the U.S. Moat Index, Jones Lang LaSalle, Inc. (JLL, +15.14%) was the largest contributor to returns in February. JLL’s stock price surged in mid-February after the release of 2018 earnings results that beat consensus estimates. Morningstar’s equity research team believes the company is better prepared to weather potential downturns now than it was during the Great Recession.

    This is not the first time JLL has been in the index portfolio. As recently as 2016, JLL was viewed by Morningstar as undervalued and was added to the index. It was later removed as its rising stock price moved more inline with its declining fair value estimate. JLL returned to the U.S. Moat Index in September and December 2018 after a sell-off that began in early August.

    Jones Lang LaSalle (JLL): Three Year Price and Fair Value as of 2/28/2019

    Moat Stock: Jones Lang LaSalle (JLL): Three Year Price and Fair Value

    Source: Morningstar. Past performance is no guarantee of future results. For illustrative purposes only. Not a recommendation to buy or sell any security. Visit vaneck.com to view daily ETF and index holdings

    According to Morningstar, JLL benefits from intangible assets, the leading source of moats, due to its brand. A positive brand can play a key role in helping companies stay ahead of competitors by promoting sales, building trust, and inspiring customer loyalty. Morningstar’s analysts believe JLL’s brand helps the company attract both clients and talent.


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    For informational and advertising purposes only.

    This information originates from VanEck (Europe) GmbH which has been appointed as distributor of VanEck products in Europe by the Management Company VanEck Asset Management B.V., incorporated under Dutch law and registered with the Dutch Authority for the Financial Markets (AFM). VanEck (Europe) GmbH with registered address at Kreuznacher Str. 30, 60486 Frankfurt, Germany, is a financial services provider regulated by the Federal Financial Supervisory Authority in Germany (BaFin). The information is intended only to provide general and preliminary information to investors and shall not be construed as investment, legal or tax advice. VanEck (Europe) GmbH and its associated and affiliated companies (together “VanEck”) assume no liability with regards to any investment, divestment or retention decision taken by the investor on the basis of this information. The views and opinions expressed are those of the author(s) but not necessarily those of VanEck. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. All indices mentioned are measures of common market sectors and performance. It is not possible to invest directly in an index.

    VanEck Vectors Morningstar US Wide Moat UCITS ETF (the “Fund”) is a sub-fund of VanEck Vectors® UCITS ETFs plc., organised under the laws of Ireland, managed by VanEck Investments Ltd. VanEck Investments Ltd delegated the investment management of the Fund to Van Eck Associates Corporation, an investment manager regulated by the U.S. Securities and Exchange commission (SEC). Any investment decision must be made on the basis of the prospectus and the key investor information document (“KIID”), which is available at www.vaneck.com. These are available in English and certain other languages at www.vaneck.com or can be requested free of charge from VanEck Investments Ltd or from the relevant local information agent details of whom to be found on www.vaneck.com. The Fund is registered with the Central Bank of Ireland and tracks an equity index.

    Morningstar® Wide Moat Focus IndexTM is a trade mark of Morningstar inc. and has been licensed for use for certain purposes by VanEck. VanEck Vectors Morningstar US Wide Moat UCITS ETF is not sponsored, endorsed, sold or promoted by Morningstar and Morningstar makes no representation regarding the advisability of investing in VanEck Vectors Morningstar US Wide Moat UCITS ETF.

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    S&P 500® Index: consists of 500 widely held common stocks covering the leading industries of the U.S. economy. Morningstar® Wide Moat Focus IndexTM consists of at least 40 U.S. companies identified as having sustainable, competitive advantages, and whose stocks are the most attractively priced, according to Morningstar.

    All performance information is historical and is no guarantee of future results. Investing is subject to risk, including the possible loss of principal. You must read the Prospectus and KIID before investing.

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  • Authored by

    Brandon Rakszawski
    Senior ETF Product Manager

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