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Van Eck Global lists Market Vectors Morningstar Wide Moat ETF


Van Eck Global has listed its Market Vectors Morningstar Wide Moat exchange-traded fund (ETF) (MOAT), giving Australian investors exposure to a concentrated portfolio of US equities with a new twist. 

This ETF seeks to leverage Morningstar equity research that aims to identify companies with wide “economic moats” or the potential to maintain a competitive advantage over the long term.

The concept of economic moats was popularised by Warren Buffett, who believes the castle is a business and the moat its competitive advantage. The wider the moat, the more sustainable the business.

MOAT tracks the Morningstar Wide Moat Focus Index, which comprises the 20 most undervalued US ‘wide moat’ companies as selected by Morningstar equity analysts. Morningstar constructs a high conviction portfolio of only 20 wide moat companies with the lowest market price to fair value ratios and equally weights them. Morningstar reconstitutes and rebalances the index quarterly. To be included in the Index, a company must trade on a US stock exchange, have a market capitalisation of at least US$100 million, and meet certain liquidity requirements. The Morningstar Wide Moat Focus Index has outperformed the S&P 500 Index since its February 2007 inception and returned 19.69% per annum over the three years to 31 May 2015.

Arian Neiron (pictured), Managing Director, Van Eck Global Australia, says: "MOAT provides Australian investors and SMSF trustees with a highly attractive investment proposition. With one trade, they can diversify their portfolios by investing in leading US companies such as Google, Berkshire Hathaway, American Express and Merck, selected according to Morningstar equity analysts. The launch of MOAT further extends Van Eck Global’s commitment to offering Australian investors innovative investment opportunities that cater to a variety of needs.”

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