Bringing you live news and features since 2006 

VanEck expands moat investing suite with launch of ETF targeting small and mid-cap Moat stocks


VanEck has announced the launch of the VanEck Morningstar SMID Moat ETF (CBOE: SMOT), the newest addition to the firm’s lineup of “moat”-focused equity funds.

The firm writes that SMOT is designed to provide investors with exposure to attractively priced US small- and mid-cap (SMID-cap) companies that Morningstar believes possess long-term competitive advantages.

“Launching SMOT is an exciting natural progression for us as we continue to build out our moat-focused fund family,” says Brandon Rakszawski, Director of Product Management with VanEck. “The flagship fund of this suite, the VanEck Morningstar Wide Moat ETF (MOAT), has attracted significant investment since its inception in 2012, driven in large part by the long-term success of its investment strategy. We’re very pleased to be adding a SMID-cap offering built around the same industry-leading research from Morningstar.”

SMOT seeks to track the Morningstar US Small-Mid Cap Moat Focus Index which targets a select group of at least 75 small- and mid-cap companies with moats that are trading at attractive valuations, according to Morningstar’s equity research team.

A historically under-allocated segment in many investor portfolios, VanEck notes that the large universe of SMID-cap companies has considerably less analyst coverage than their large cap-counterparts, creating dispersion between stock prices and fair value. This dynamic reinforces the value of an index that draws on the collective insights of Morningstar’s 100+ person equity research team.

“SMID-cap stocks are an attractive segment of the U.S. equity market, as they’ve historically provided greater return potential than large caps. We’re currently seeing SMID-cap valuations at a 20-year low, relative to their large-cap counterparts, offering investors a timely and attractive entry point,” says Rakszawski. “The key with this category is to approach it through a research-driven lens as the dispersions in performance, valuations and more can be stark. That is why we’re so pleased to continue our collaboration with Morningstar on these efforts, and why we see SMOT as a highly differentiated vehicle through which to add exposure to this category.”

“This is a great opportunity to build on our longstanding and successful collaboration with VanEck, while extending the Moat index franchise,” says Amelia Furr, Global Head of Sales for Morningstar Indexes. “Similar in approach to our highly successful Morningstar Wide Moat Focus Index, the Morningstar US Small-Mid Cap Moat Focus Index taps into the collective insights of the Morningstar Equity Research team to provide exposure to small- and mid-cap companies with strong Morningstar Economic MoatTM Ratings that are trading at relatively low current market price to fair value estimates.”

Latest News

Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

Kristen Mierzwa, FTSE Russell
Index Investments Group (IIG), a division within index provider FTSE Russell, has extended its range of indices through two new...
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by