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VanEck reports US moat companies benefited from Trump win

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VanEck reports that overall, moat companies, companies with structural competitive advantages, benefited from the election of Donald Trump.


VanEck reports that overall, moat companies, companies with structural competitive advantages, benefited from the election of Donald Trump.

“The healthcare and banking sectors in particular breathed a sigh of relief,” says Uwe Eberle, (pictured) Head of International Business Development and Distribution at VanEck. Pharma giants such as Amgen, McKesson, and AmerisourceBergen struggled with the prospects of potentially higher regulation and price controls under a Clinton administration, the firm writes.

They recovered significantly after the election after their stocks had posted unimpressive returns throughout the week before. The banking sector, which also stands to benefit from potentially reduced regulations and higher interest rates under Trump, saw a boost as well, led by Wells Fargo with returns of more than 13 per cent in the two days following the election.

Uncertainty over immigration and trade policy affected the technology sector in particular. Tech companies rely on skilled workers from outside the US and have significant business ties to Mexico and Latin America. Stocks like Amazon.com, Western Union, and Salesforce.com were heavily sold in the immediate aftermath of the election, VanEck writes. Outside the technology sectors, Starbucks was among the negatively affected stocks.

The VanEck Vectors Morningstar US Wide Moat UCITS ETF is the first ETF in Europe to provide exposure to US companies with a Morningstar Economic Moat Rating of Wide. The underlying index developed by Morningstar is based on the idea of economic moats, long-term structural advantages that allow a company to withstand competition. The Morningstar Wide Moat Focus Index has outperformed the broader US equity market since its inception and year to date the index has outperformed the S&P 500 Index by 12.43 per cent.

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