Van Eck Global Investments has launched the Market Vectors Morningstar US Wide Moat UCITS ETF, the first ETF in Europe to provide exposure to ‘wide moat’ companies, as defined by research firm Morningstar, Inc.
The ETF is listed on the LSE and tracks the equally weighted Morningstar Wide Moat Focus Index based on Morningstar’s proprietary economic moat rating and valuation research, inspired by Warren Buffet’s famous requirement for an attractive company to be effectively a large castle with a wide moat. The MOAT ETF allows exposure to the 20 most attractively priced US high-quality companies with a wide Economic Moat rating.
Since its inception in 2007, the index has outperformed the US equity market with a cumulative performance of 122.45 per cent while that of the S&P 500 Index was 68.09 per cent.
Lars Hamich, chief executive officer with Van Eck Global (Europe) explains that the firm is bringing to Europe one of its most popular funds from the US, in the same manner as it did with its gold ETF. The US version of the Moat ETF has close to USD1 billion.
Hamich says: „While US equity is mainstream, the ETF is not. The ETF-underlying is a specialised index covering only companies that have a structural competitive advantage over a long period of time. This is a unique ETF.”
Alex Morozov, director of European Equity Research at Morningstar says, of the moat methodology: “It’s not just a case of investment in high quality companies but also of layering a valuation on top which does get high performance.”
