Inside ETFs: InvestmentNews EVENTS
Moat investing is important because it helps you identify great companies. You buy them at a great price and over the long term that has proven to be a tried-and-true element of investing success. Find great companies, buy them at a great price. The one element to the moat ETF [VanEck Vectors Morningstar Wide Moat ETF (MOAT®)] is, with the Morningstar research, there's a process built into it as well. So that's the third step: being able to repeat that process over and over again in an unemotional way—and we've seen that since the index [Morningstar® Wide Moat Focus IndexSM] has been launched in 2007, it's performed very well.
There is not only the process involved with it, but some of the other large-cap strategies that advisers might be using might be either just basic cap weight strategies, which are prone to biases in certain sectors. We saw tech become a pretty big sector in the index [S&P 500® Index] towards the end of 2018. MOAT by virtue of its process, and trying to identify companies that are undervalued relative to their peers, you end up with an almost kind of contrarian strategy and, you know, you're buying companies at a lower relative price that gives you a higher probability of success in the future.
We teamed up with Morningstar for this ETF in particular because of their great equity research. They have a hundred analysts covering 1,500 stocks globally. That's a huge team of people looking and monitoring these different stocks, evaluating them for their competitive advantage and applying their price-to-fair-value process. We think that is a strong competitive advantage in of itself for the ETF.
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The views and opinions expressed are those of the speaker and are current as of the video’s posting date. Video commentaries are general in nature and should not be construed as investment advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. It is not possible to invest directly in an index. Information on holdings, performance and indices can be found at vaneck.com.
An investment in the VanEck Vectors Morningstar Wide Moat ETF (MOAT®) may be subject to risks which include, among others, investing in the health care, consumer discretionary, industrials, financial services sectors, medium-capitalization companies, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified, and concentration risks, which may make these investments volatile in price or difficult to trade. Medium-capitalization companies may be subject to elevated risks. The 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.
Fund shares are not individually redeemable and will be issued and redeemed at their net asset value (NAV) only through certain authorized broker-dealers in large, specified blocks of shares called "creation units" and otherwise can be bought and sold only through exchange trading. Shares may trade at a premium or discount to their NAV in the secondary market. You will incur brokerage expenses when trading Fund shares in the secondary market. Past performance is no guarantee of future results.
Investing involves substantial risk and high volatility, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. An investor should consider a Fund’s investment objective, risks, charges and expenses carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
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