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In this episode of ETF Spotlight, I speak with Brandon Rakszawski, Director, ETF Product Development at VanEck. We discuss “moat investing” approach and the VanEck Vectors Morningstar Wide Moat ETF MOAT.
The term “economic moat” was popularized by legendary investor Warren Buffett who said that he seeks "economic castles protected by unbreachable moats.” In simple words, a moat is a unique competitive advantage that allows a company to outperform others in the same industry over time.
The Morningstar Wide MOAT Focus Index tracks attractively priced companies with sustainable competitive advantages. Brandon walks us through the concept of economic moats and the different sources of moat. These sources include intangible assets, cost advantages, switching costs, network effects and efficient scale.
MOAT provides exposure to 40 companies with sustainable competitive advantages. Amazon AMZN is the top holding in the portfolio. The largest online retailer has seen a surge in business since the start of the crisis. It is also the largest player in cloud computing, which has seen an exponential increase in usage by companies as their employees are working from home now.
Another top holding—ServiceNow NOW--provides enterprise cloud computing solutions. Biotech giant Gilead GILD, which is conducting multiple clinical trials of coronavirus drug remdesivir, is another top holding.
There are some “hidden gems” too. For example, not many investors have heard of Corteva CTVA which provides agriculture products. Tune into the podcast to learn more.
Healthcare, Technology and Financials are the top sectors in MOAT that has outperformed the S&P 500 index since its inception in April 2012.
The VanEck Vectors Morningstar Global Wide Moat ETF GOAT and VanEck Vectors Morningstar International Moat ETF MOTI hold attractively valued global and international firms with a sustainable competitive advantage.
If you want to learn about this ETF and other VanEck products, please visit vaneck.com.
Make sure to tune in for next podcast. If you have any comments or questions, please email podcast@zacks.com
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Amazon.com, Inc. (NASDAQ:AMZN): Free Stock Analysis Report
Gilead Sciences, Inc. (NASDAQ:GILD): Free Stock Analysis Report
ServiceNow, Inc. (NOW): Free Stock Analysis Report
VanEck Vectors Morningstar International Moat ETF (MOTI): ETF Research Reports
VanEck Vectors Morningstar Wide Moat ETF (MOAT): ETF Research Reports
VanEck Vectors Morningstar Global Wide Moat ETF (GOAT): ETF Research Reports
Corteva, Inc. (CTVA): Free Stock Analysis Report
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