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MOAT INVESTING Just Launched: Wide Moat Growth ETF (MGRO) and Wide Moat Value ETF (MVAL) Clients asked. We delivered. We are thrilled to now offer the VanEck Morningstar Wide Moat Growth ETF (MGRO) and VanEck Morningstar Wide Moat Value ETF (MVAL). These two new ETFs are built on the foundation of our flagship VanEck Morningstar Wide Moat ETF (MOAT).
MGRO and MVAL allow investors to access Morningstar’s forward-looking equity research that identifies quality companies trading at attractive valuations and express their views on growth versus value in the US market.
Not yet enough AUM or trading volume to dip our toes in but holdings and other information is available. Since they are only a day old, not all stock services may recognize the tickers yet.
If one is inclined to actively manage MOAT, these two (MGRO and MVAL) give one additional tools. Note that MOAT has approx 55 holdings whereas the new ones have approx 40 holdings and as such the new funds are more concentrated (& focused).
Also, info at this link is useful to have some discussion about these new moat ETFs.
I view MOAT as an excellent concentrated fund with a sound strategy supporting it. Not sure if a further breakdown would be better, or simply add more risk.
Because of its methodology, MOAT ends up selling constituents too soon or hang on to value traps longer than necessary. YTD, MOAT is the worse performing of any fund I have in my watchlist. As much as I like the moat theme, it is unlikely I am going to add anymore to MOAT (5% allocation); so it increases or decreases in allocation by its performance in the portfolio. I am guessing if I were to buy one of the new ones, it is going to be MGRO which I am guessing is likely going to be larger cap than MOAT. And the buy will be in an IRA to trade it if necessary.
I’m satisfied with MOAT, but I think Van Eck is guilty of ETF proliferation. Already they sponsor moat funds for international, ESG, global, and SMID, none of which derivative ETFs have done particularly well. Growth and value moat flavors don’t tempt me, either.
I appreciate you drawing my attention to recent performance of MOAT. In fact, over the past nine months it is lagging two other ETFs I like, TCAF and DSTL. The new fund from Capital Group, CGDV, has done better than all three, to my surprise. Maybe the MOAT mechanism sells winners too soon as you, or another member, has suggested.
Below is the latest VanEck commentary (Mea Culpa?) about MOAT. YTD, its TR is lower than that of many bond funds, including your MMs, but ample volatility is provided for free. MOAT is a good example of how anti-momentum can hurt; I do not see a way out of this problem if you are stuck in MOAT.
Most investors should keep it simple. The SP500 has proven that over long time, think 20-30 years it beats most stock funds because it represents 2 simple ideas 1) American capitalism. 2) The index is a cap weighted index Bogle built Vanguard on that. Why mess up with this formula is beyond me? but many "experts" have been trying for decades to come up with "great" new ideas and many continue to fall for that. It doesn't mean it's a guaranteed but in most cases, less is more, more diversification usually means more trading= more mistakes. It gets worse, so much time and energy are being wasted too.
MOAT reconstitution / rebalancing is on Friday (6/21). Since the last quarterly reconstitution / rebalancing, the fund returned negative 2% while SPY returned positive 7% during the same period.
Comments
If one is inclined to actively manage MOAT, these two (MGRO and MVAL) give one additional tools. Note that MOAT has approx 55 holdings whereas the new ones have approx 40 holdings and as such the new funds are more concentrated (& focused).
Also, info at this link is useful to have some discussion about these new moat ETFs.
https://www.vaneck.com/us/en/blogs/moat-investing/mval-etf-and-mgro-etf-question-answer/
IDK. Maybe you should just focus on the best stocks in the thesis, rather than splitting them by cap boxes.
https://www.vaneck.com/us/en/blogs/moat-investing/moats-future-focus-beyond-ai-and-short-term-setbacks/
1) American capitalism.
2) The index is a cap weighted index
Bogle built Vanguard on that.
Why mess up with this formula is beyond me? but many "experts" have been trying for decades to come up with "great" new ideas and many continue to fall for that.
It doesn't mean it's a guaranteed but in most cases, less is more, more diversification usually means more trading= more mistakes.
It gets worse, so much time and energy are being wasted too.
https://www.nytimes.com/2024/06/18/opinion/capitalism-inflation.html
Stephens often is kind of a dope and this brief piece has no point after its halfway mark, but the first half sure has some eye-opening facts.