MOAT: Possible S&P 500 Alternative

seekingalpha06-07

SlavkoSereda/iStock via Getty Images Investors often diversify their portfolios by dollar-cost-averaging into index ETFs. Among the most popular ones are the SPDR S&P 500 ETF (SPY) and the Vanguard S&...

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Among the most popular ones are the SPDR S&P 500 ETF (SPY) and the Vanguard S&...</p>\n\n<a href=\"https://seekingalpha.com/article/4698009-moat-possible-s-and-ampp-500-alternative\">Source Link</a>\n\n</div>\n","source":"seekingalpha_fund","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>MOAT: Possible S&P 500 Alternative</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMOAT: Possible S&P 500 Alternative\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-07 21:16 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4698009-moat-possible-s-and-ampp-500-alternative><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SlavkoSereda/iStock via Getty Images Investors often diversify their portfolios by dollar-cost-averaging into index ETFs. Among the most popular ones are the SPDR S&P 500 ETF (SPY) and the Vanguard S&...</p>\n\n<a href=\"https://seekingalpha.com/article/4698009-moat-possible-s-and-ampp-500-alternative\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4577","symbol_name":"网络游戏","start_time":0,"source_url":"https://seekingalpha.com/article/4698009-moat-possible-s-and-ampp-500-alternative","article_id":"2441613670","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1213764535/image_1213764535.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2441613670","pubTimestamp":1717766215,"sourceInfo":{"source_id":"seekingalpha_fund","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"SlavkoSereda/iStock via Getty Images Investors often diversify their portfolios by dollar-cost-averaging into index ETFs. Among the most popular ones are the SPDR S&P 500 ETF (SPY) and the Vanguard S&","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4577":"网络游戏","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","BK4579":"人工智能","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","TER.AU":"TERRACOM LTD","IE00BDCRKT87.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC","IE00BJTD4V19.USD":"NEUBERGER BERMAN US LONG SHORT EQUITY \"A1\" (USD) ACC","BK4588":"碎股","BK4141":"半导体产品","FDN":"First Trust Dow Jones Internet I","LU0056508442.USD":"贝莱德世界科技基金A2","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","SDS":"两倍做空标普500ETF","SSO":"两倍做多标普500ETF","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","UPRO":"三倍做多标普500ETF","SH":"标普500反向ETF","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","SPXU":"三倍做空标普500ETF","LU0965509010.AUD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (AUDHDG) INC","SPY.AU":"SPDR® S&P 500® ETF Trust","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","MSFT":"微软","NVDA":"英伟达","RTX":"雷神技术公司","SPY":"标普500ETF",".SPX":"S&P 500 Index","OEX":"标普100","GOOG":"谷歌","TER":"泰瑞达","IVV":"标普500指数ETF","LU0861579265.USD":"联博低波幅策略股票基金A","BK4571":"数字音乐概念","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","BK4585":"ETF&股票定投概念","MOAT":"Market Vectors Wide Moat Etf","BK4576":"AR","STT":"道富银行","LU1316542783.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD","LU0289739343.SGD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (SGD) ACC","OEF":"标普100指数ETF-iShares","BK4575":"芯片概念","BK4566":"资本集团","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","BK4587":"ChatGPT概念","VOO":"Vanguard标普500ETF","LU0957808578.USD":"THREADNEEDLE (LUX) GLOBAL TECHNOLOGY \"ZU\" (USD) ACC"},"translate_title":"护城河：可能的标普500替代方案","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"VOO":1,".SPX":1,"MOAT":1,"MSFT":1,"NVDA":1,"RTX":1,"GOOG":1,"SPY":1,"SPY.AU":1,"TER":1,"TER.AU":1,"FDN":0.9,"STT":0.9,"UPRO":0.6,"OEF":0.6,"OEX":0.6,"SSO":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,"ESmain":0.6,"IVV":0.6},"content_text":"SlavkoSereda/iStock via Getty Images Investors often diversify their portfolios by dollar-cost-averaging into index ETFs. Among the most popular ones are the SPDR S&P 500 ETF (SPY) and the Vanguard S&P 500 ETF (VOO), both of which track the S&P 500 as their underlying index. The S&P 500, which tracks the top 500 companies in the US stock market, is often the prime choice for most ETF investors due to the index's strong portfolio and historical performance. In this article, I introduce a potential alternative known as VanEck Morningstar Wide Moat ETF (BATS:MOAT), and explain why it's worth a look. The Underlying Index As with all index ETFs, MOAT's underlying index is the Morningstar Wide Moat Focus Index (MWMFTR), which comprises of companies which meet two key criteria. 1. The company has a significant competitive advantage in its industry, which is sustainable in the long run. 2. The company is valued close to its intrinsic value. Much like an economic moat, the index plans to provide investors access to a portfolio of attractively-valued companies which are the best in their respective sectors. The portfolio is reconstituted twice a year on a quarterly schedule to ensure the index is rebalanced frequently based on its investment goals. MOAT ETF is an investment instrument for those who believe in the long-term growth of this underlying index. Fund Performance MOAT ETF Fund Performance against MWMFTR and S&P 500 (VanEck) Since its inception in late April 2012, we observe that MOAT ETF has delivered an impressive annualized growth of 14.17%. In the same time period, the corresponding returns of the S&P 500 were 13.58%. Few funds have managed to outperform the S&P 500 over a horizon exceeding 10 years, so this is definitely a great indication of MOAT ETF's fund performance. That being said, the ETF has not been around for that long, and it remains to be seen if MOAT ETF will be able to keep up its performance during potential economic headwinds to come. In particular, many economists are skeptical about the economy's 'soft landing', especially when taking other factors, like the US debt crisis or the ongoing war situation, into account. We'll need to see in time to come if the MOAT's holdings are able to weather a potential economic storm. Portfolio Holdings and Sector Allocation MOAT ETF Top 10 Holdings and Sector Allocation (VanEck)SPY ETF Top 10 Holdings (State Street Global Advisors)SPY ETF Sector Allocation (State Street Global Advisors) Next, we go over MOAT ETF's top holdings and sector weightings. We see Alphabet (GOOG), RTX Corp (RTX) and Teradyne (TER) as the portfolio's top holdings. A noteworthy observation is that the weightage of the various stocks in MOAT ETF's portfolio (% of net assets) is pretty evenly distributed. Even among the top 10 holdings, the weightage of each stock is between 2.54% and 3.04%. In comparison, SPY ETF's portfolio has significantly higher weightage in companies like NVIDIA Corp (NVDA), Apple (AAPL) and Microsoft (MSFT), as shown in the tables above. Another point is that almost a third of the SPY ETF's portfolio is in information technology, with much lesser of the fund invested in other sectors. We see a pretty different case with MOAT ETF, whose sector allocation is a lot more evenly distributed across the most lucrative industries today. While we cannot say for sure whether there is a strictly better portfolio allocation between the two, what we do know is that MOAT ETF's portfolio structure appears to be more diversified, while that of SPY ETF's is more tech-heavy due to the number of large-cap tech companies in its portfolio. This is a key point of consideration when deciding which ET is a more suitable investment. Valuation   MOAT ETF Valuation Metrics (VanEck)SPY ETF Valuation Metrics (State Street Global Advisors) We observe that MOAT ETF has a higher price-to-earnings ratio, but lower price-to-book ratio than SPY ETF. There isn't too much to be said if you implement a dollar-cost-averaging strategy for either ETF, but as a lump sum investment, both ETFs are trading at relatively expensive multiples. In particular, the long-term average price-to-earnings ratio of SPY and MOAT ETF are 17.6 and 20.1 respectively, so the current multiples may be a sign of overvaluation (though this is not always the case!). Fund-related Costs   MOAT ETF Fund-related Costs (VanEck)SPY ETF Fund-related Costs (State Street Global Advisors) Due to frequent rebalancing of the MWMFTR Index (which is tracked by MOAT ETF), the fund's expense ratio is significantly higher than that of SPY ETF. This is because a high management cost of 0.45% has been factored into the gross expense ratio. As an investment, MOAT ETF would underperform SPY ETF by quite a margin if both funds had matching returns. Performance Differential MOAT ETF Performance Differential (VanEck) One concerning point is that there is a pretty high-performance differential between MOAT ETF and the MWMFTR Index. The performance differential, which is the difference in annualised returns when the ETF's net asset value is compared to its underlying index, stands at -0.59% since inception, and the 1-year differential is actually worse, standing at -0.64%. This is an indication that MOAT ETF is, to some extent, underperforming its own underlying index by quite a margin. Investment Decision  All in all, MOAT ETF is a great option to consider if you'd like to dollar-cost-average into a fund comprising of profitable companies at good valuations. However, the fund does have its problems when it comes to maintaining low fees and replicating the performance of its underlying index. That being said, it's difficult to understate the impressive returns of the fund since its inception. MOAT ETF also offers more sector diversification as compared to the more tech-heavy SPY ETF. As such, I do believe that it is a suitable alternative to ETFs which track the S&P 500. One could also consider investing in both to maximise portfolio diversification. I conclude my analysis with a 'Buy' rating for MOAT ETF.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.26.4","shortVersion":"4.26.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2441613670"}