Etikett: MOAT

Strong Finish to 2017

Strong Finish to 2017 VanEck MOAT ETF MOTI ETFStrong Finish to 2017

Strong Finish to 2017 by VanEck, For the Month Ending December 31, 2017

Performance Overview

International moats, as represented by the Morningstar® Global ex-US Moat Focus IndexSM ( MGEUMFUN, or ”International Moat Index”), trailed the MSCI All Country World Index ex-USA in December (1.75% vs. 2.24%), but finished with full-year outperformance of greater than 3% (30.36% vs. 27.19%). The U.S.-oriented Morningstar® Wide Moat Focus IndexSM ( MWMFTR, or ”U.S. Moat Index”) followed a strong November with positive relative performance in December, toping the broad U.S. markets as represented by the S&P 500® Index (1.66% vs. 1.11%). The U.S. Moat Index finished the year ahead by roughly 2% (23.79% vs. 21.83%).

International Moats: Japan Weighs, Australia and Brazil Boost

Together with several firms from Japan, utilities and telecommunications firms struggled in the International Moat Index for the month. The bottom three performing companies in the International Moat Index were Japanese companies. Nippon Telegraph & Telephone Corp (9432 JP, -10.43%), which owns mobile telephone operator NTT DoCoMo, struggled in December after posting quarterly results generally in line with expectations in November. SoftBank Group Corp (9984 JP, -6.58%) also struggled in December. The company has a wide range of international and e-commerce investments in its portfolio, some of which compete directly with the aforementioned Nippon Telegraph & Telephone Corp. On the other side of the coin, financials and consumer discretionary companies contributed strongly to International Moat Index returns and the Index also received a strong boost from companies in Australia, Hong Kong, Canada, and Brazil. The International Moat Index standout was Brazilian aviation company Embraer SA (EMBR3 BZ, +26.46%), following speculation that Boeing was in talks to buy the company. Shares of Embraer SA shot up and approached Morningstar’s fair value estimate of $26 per share at year end.

U.S. Domestic Moats: Consumer Discretionary Shines

Consumer discretionary companies were the primary driver of strong performance for the U.S. Moat Index in December. While Express Scripts Holding Co (ESRX US, +14.51%) was the top performing index constituent in December, firms such as Lowe’s Companies, Inc. (LOW US, +11.48%), Twenty-First Century Fox Inc. (FOXA US, +8.11%), and L Brands Inc. (LB US, +7.40%) helped consumer discretionary lead the way. Tech firm Veeva Systems Inc. (VEEV US, -8.19%) was the worst performing stock in the U.S. Moat Index after issuing 2019 fiscal year guidance below expectations. The firm provides client relationship management services to the pharmaceutical industry and Morningstar lowered its fair value estimate four dollars to $65 on December 6th. The consumer staples and information technology sectors were the two sectors to detract from index performance, but only slightly.

Important Disclosures

This commentary is not intended as a recommendation to buy or to sell any of the named securities. Holdings will vary for the MOAT and MOTI ETFs and their corresponding Indices.

VanEck Starts ETF Distribution in Denmark

VanEck Starts ETF Distribution in Denmark

VanEck  announced that its suite of UCITS Exchange Traded Funds (ETFs) is now registered for distribution in Denmark. The registration of the VanEck Vectors UCITS ETFs in Denmark marks the next step in the expansion of the firm’s ETF business in Europe. Going forward, Danish investors will have access to all fund information, research, investment themes, and other services relating to the VanEck UCITS ETFs. VanEck Starts ETF Distribution in Denmark.

“We are committed to making our funds and services available to European investors, and registering our ETFs broadly allows us to respond to investors’ interests,” said Eduardo Escario, Director International Business Development at VanEck. “Danish investors have been very interested in fixed income funds and we are particularly pleased to add our recently launched emerging markets fixed income UCITS ETF to the UCITS ETF line-up in Denmark,” Mr. Escario added.

The VanEck Vectors J.P. Morgan EM Local Currency Bond UCITS ETF (EMLC) allows investors to participate in local emerging markets economies, which tend to provide higher yields than developed markets and potential for currency appreciation. Local currency emerging markets bonds tend to have a lower correlation to the U.S. dollar and help to diversify a portfolio.

The VanEck Vectors Gold Miners UCITS ETF (GDX) and the VanEck Vectors Junior Gold Miners UCITS ETF (GDXJ) provide access to the global gold mining sector. GDX covers a comprehensive portfolio of large, mid-sized, and small global gold mining companies. GDXJ invests in micro-, small-, and medium-capitalisation mining companies, called “juniors” because they are in an exploratory or early mining phase.

The VanEck Vectors Morningstar US Wide Moat UCITS ETF is the only ETF in Europe to provide exposure to U.S. companies with a Morningstar® Economic MoatTM Rating of Wide. The underlying index developed by Morningstar is based on the idea of economic moats, i.e. long-term structural advantages that allow a company to withstand competition. The Morningstar Wide Moat Focus Index has outperformed the broader U.S. equity market since its inception.

###

VanEck offers intelligently designed investment strategies that take advantage of targeted market opportunities. Founded in 1955, VanEck was a pioneer in global investing with a history of placing clients’ interests first in all market environments. The firm continues this tradition by offering active and ETF portfolios in hard assets, emerging markets, fixed income, and other assets classes.

The Morningstar® Wide Moat Focus IndexSM was created and is maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell or promote the VanEck Vectors Morningstar US Wide Moat UCITS ETF and bears no liability with respect to that ETF. The index provides exposure to companies with a Morningstar Economic Moat Rating of “wide” that are trading at the lowest current market price/fair value ratios. Moat Ratings and fair value estimates are determined by the Morningstar Equity Research Team.

Morningstar Wide Moat Focus Index A History of Outperformance (Part 2/2)

Morningstar Wide Moat Focus Index A History of Outperformance (Part 2/2)

Morningstar Wide Moat Focus Index A History of Outperformance (Part 2/2)  is part two of a two-part series that examines the Morningstar® Wide Moat Focus IndexTM. The previous post described how the index is constructed.

Outperformance

The Morningstar Wide Moat Focus Index (MWMFTR or “U.S. Moat Index”) is designed to capture the performance of U.S. companies with a Morningstar Economic Moat Ranking of Wide that are trading at an attractive price. The strategy of combining quality and value has resulted in an index track record of generating significant excess returns relative to the overall U.S. equity market. With an appreciation of 203.66 percent since inception in February 2007, the U.S. Moat Index has outpaced the S&P 500 Index by a total of 95.24 percentage points. Looking at the annualized performance, the Morningstar index has outperformed the broader U.S. market by roughly four percentage points. (Data as of 31.05.2017).

This longer-term trend is also reflected in the more recent performance: Moat-companies in the US equity market have profited stronger from the Rally that started in the beginning of this year than the broader market. While the year-to-date-performance of the S&P is at 8.66 percent, the U.S. Moat Index posted returns of 10.68 percent (Data as of 31.05.2017).

Batting Average

Measured against the S&P 500 Index, the U.S. Moat Index also features an impressive batting average, particularly over long-term holding periods. Batting average is a sports metaphor that is used in finance to describe the level of relative success for an investment strategy. Specifically, it indicates how often an investment strategy has outperformed a benchmark through various periods over time. The batting average is measured by dividing the number of periods a portfolio or investment strategy outperforms a benchmark by the total number of periods. On a six-month rolling period, the performance of the MWMFTR outperformed the S&P 500 in 59 percent of all cases. For three years rolling period, this figure is as high as 78 percent (Data as of 31.05.2017).

Important Disclosures

This commentary is not intended as a recommendation to buy or to sell any of the named securities. Holdings will vary for the MOAT ETF and their corresponding Indices.

Index performance is not representative of fund performance. To view fund performance current to the most recent month end, visit vaneck.com.

An investor cannot invest directly in an index. Returns reflect past performance and do not guarantee future results. Results reflect the reinvestment of dividends and capital gains, if any. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.

Fair value estimate: the Morningstar analyst’s estimate of what a stock is worth.

Price/Fair Value: ratio of a stock’s trading price to its fair value estimate.

The Morningstar® Wide Moat Focus IndexSM was created and are maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck Vectors® Morningstar Wide Moat UCITS ETF and bears no liability with respect to the ETF or any security. Morningstar® is a registered trademark of Morningstar, Inc. Morningstar Wide Moat Focus Index is a service marks of Morningstar, Inc.

The Morningstar Wide Moat Focus Index consists of U.S. companies identified as having sustainable, competitive advantages and whose stocks are attractively priced, according to Morningstar.

The S&P 500® Index consists of 500 widely held common stocks covering the leading industries of the U.S. economy.

Effective June 20, 2016, Morningstar implemented several changes to the Morningstar Wide Moat Focus Index construction rules. Among other changes, the index increased its constituent count from 20 stocks to at least 40 stocks and modified its rebalance and reconstitution methodology. These changes may result in more diversified exposure, lower turnover, and longer holding periods for index constituents than under the rules in effect prior to this date. Past performance is no guarantee of future results.

Morningstar Wide Moat Focus Index Index Construction (Part 1/2)

Morningstar Wide Moat Focus Index Index Construction (Part 1/2)

Morningstar Wide Moat Focus Index Index Construction (Part 1/2)

Long-term outperformance defines the track record of Morningstar’s success in identifying quality moat companies that are also trading at attractive valuations.

The Morningstar® Wide Moat Focus IndexTM has outperformed the broader U.S. market since its inception in 2007. What is behind the index concept that has achieved such a track record?

This is part one of a two-part series that examines the Morningstar® Wide Moat Focus IndexTM

The Quality and Value of Stocks

Moat Investing is a popular investment strategy based on analysing the quality and value of stocks. Central to the strategy are companies with sustainable competitive advantages – so called Economic Moats. Identifying promising moat companies takes extensive, continuous research and complex financial knowledge. Independent investment research company Morningstar has developed an index that combines their extensive moat analysis and fair value research. The Morningstar Wide Moat Focus Index (MWMFTR or “U.S. Moat Index”) consists of stocks that received a Wide Moat Rating by Morningstar and are trading below fair value – in other words, stocks that are positioned to deliver long-term above-average returns. Serving as underlying for an exchange-traded fund, the index offers an attractive, simple way to invest in quality U.S. companies.

Identifying Wide Economic Moats

The index universe of the MWMFTR is based on the stock universe of the Morningstar US Market Index, which consists of around 1.500 U.S. stocks. From this pool, which equals 97 percent of the total US equity market capitalization, Morningstar determines all companies with a wide Economic Moat: Companies with competitive advantages that are likely to be maintained for 20 years or more. Approximately 140 companies receive a corresponding Morningstar® Economic Moat Rating of Wide. Stocks are screened for five sources of moat. Often, a company possesses more than one source of moat. The most common ones among U.S. companies are: Intangible Assets (74 percent of U.S. stocks with a wide Morningstar® Economic Moat Rating), Cost Advantages (49 percent) and Switching Costs (35 percent). Network effects (18 percent) and an Efficient Scale (11 percent) are less common (Data as of: 30.04.2017 )

Ranking by Valuation

In the second step, Morningstar ranks these 140 identified wide moat companies on the U.S. equity market by valuation. Only attractively rated stocks are considered as potential index components for the U.S. Moat Index. Therefore, Morningstar’s analysts determine a fair value estimate of each company identified as Wide Moat. The focus of the analysis is on evaluating the future potential profitability and assessing the certainty of future cash flows. The estimated fair price is used to represent the intrinsic value of the stock and is directly compared to its market price. The determined fair value estimate might differ sharply from the current market price of a stock, particularly short-term. Over time, this difference tends to even out, turning undervalued stocks into an attractive investment long-term. Stocks whose market price is above the fair value tend to have little prospects of further price gains.

As a result, the index portfolio contains a minimum of 40 up to 80 stocks with a Morningstar Economic Moat Rating of wide. These components are split up into two equally-weighted sub-portfolios, which are both reconstituted and rebalanced semi-annually on alternating quarters. Weights will vary with market prices until the next reconstitution date.

Important Disclosures

This commentary is not intended as a recommendation to buy or to sell any of the named securities. Holdings will vary for the MOAT ETF and their corresponding Indices.

Index performance is not representative of fund performance. To view fund performance current to the most recent month end, visit vaneck.com.

An investor cannot invest directly in an index. Returns reflect past performance and do not guarantee future results. Results reflect the reinvestment of dividends and capital gains, if any. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.

Fair value estimate: the Morningstar analyst’s estimate of what a stock is worth.

Price/Fair Value: ratio of a stock’s trading price to its fair value estimate.

The Morningstar® Wide Moat Focus IndexSM was created and are maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck Vectors® Morningstar Wide Moat UCITS ETF and bears no liability with respect to the ETF or any security. Morningstar® is a registered trademark of Morningstar, Inc. Morningstar Wide Moat Focus Index is a service marks of Morningstar, Inc.

The Morningstar Wide Moat Focus Index consists of U.S. companies identified as having sustainable, competitive advantages and whose stocks are attractively priced, according to Morningstar.

The S&P 500® Index consists of 500 widely held common stocks covering the leading industries of the U.S. economy.

Effective June 20, 2016, Morningstar implemented several changes to the Morningstar Wide Moat Focus Index construction rules. Among other changes, the index increased its constituent count from 20 stocks to at least 40 stocks and modified its rebalance and reconstitution methodology. These changes may result in more diversified exposure, lower turnover, and longer holding periods for index constituents than under the rules in effect prior to this date. Past performance is no guarantee of future results.

Morningstar Wide Moat Focus Index A History of Outperformance

Morningstar Wide Moat Focus Index A History of Outperformance

Long-term outperformance defines the track record of Morningstar’s success in identifying quality moat companies that are also trading at attractive valuations. Morningstar Wide Moat Focus Index A History of Outperformance

The Morningstar® Wide Moat Focus IndexTM has outperformed the broader U.S. market since its inception in 2007. What is behind the index concept that has achieved such a track record?

US Moats: Ups and Downs in May

Performance Overview

The U.S.-oriented Morningstar® Wide Moat Focus IndexSM ( MWMFTR, or “U.S. Moat Index”) lagged the S&P 500® Index in May (0.51% vs. 1.41%). Despite this underperformance, the U.S. Moat Index remains ahead of the S&P 500 Index year-to-date (10.68% vs. 8.66%).

U.S. Domestic Moats: Ups and Downs

McKesson Corp (MCK US, +17.93%) rebounded in May after facing headwinds in previous quarters. The firm posted solid results for its fiscal fourth quarter which Morningstar equity analysts believe reaffirms their view of the company’s long-term fundamentals. MCK US was the top performer in the U.S. Moat Index in May and remained undervalued in Morningstar’s view at month end. In terms of sector performance in May, information technology was the top contributor to the U.S. Moat Index’s performance, with all five sector constituents posting positive performance. By contrast, the financials, consumer staples, real estate, consumer discretionary, and materials sectors all detracted from U.S. Moat Index performance in May, and were the primary reason for the Index’s underperformance relative to the S&P 500 Index. Twenty-First Century Fox, Inc. (FOXA US, -11.20%) was the worst performing Index constituent in May, primarily due to disappointing fiscal third quarter results driven by its film studio unit.

(Click to enlarge)

Important Disclosures

This commentary is not intended as a recommendation to buy or to sell any of the named securities. Holdings will vary for the MOAT ETF and their corresponding Indices.

Index performance is not representative of fund performance. To view fund performance current to the most recent month end, visit vaneck.com.

An investor cannot invest directly in an index. Returns reflect past performance and do not guarantee future results. Results reflect the reinvestment of dividends and capital gains, if any. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.

Fair value estimate: the Morningstar analyst’s estimate of what a stock is worth.

Price/Fair Value: ratio of a stock’s trading price to its fair value estimate.

The Morningstar® Wide Moat Focus IndexSM was created and are maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck Vectors® Morningstar Wide Moat UCITS ETF and bears no liability with respect to the ETF or any security. Morningstar® is a registered trademark of Morningstar, Inc. Morningstar Wide Moat Focus Index is a service marks of Morningstar, Inc.

The Morningstar Wide Moat Focus Index consists of U.S. companies identified as having sustainable, competitive advantages and whose stocks are attractively priced, according to Morningstar.

The S&P 500® Index consists of 500 widely held common stocks covering the leading industries of the U.S. economy.

Effective June 20, 2016, Morningstar implemented several changes to the Morningstar Wide Moat Focus Index construction rules. Among other changes, the index increased its constituent count from 20 stocks to at least 40 stocks and modified its rebalance and reconstitution methodology. These changes may result in more diversified exposure, lower turnover, and longer holding periods for index constituents than under the rules in effect prior to this date. Past performance is no guarantee of future results.