VanEck Rolls Out Latest 'Moat' ETF

VanEck Rolls Out Latest 'Moat' ETF

The fund tracks an index of companies with competitive advantages.

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Reviewed by: Shubham Saharan
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Edited by: Shubham Saharan

VanEck Securities, the New-York based asset manager with $48 billion in assets, launched the latest of its exchange-traded funds that seek to invest in companies with so-called wide moats, or competitive advantages.  

The VanEck Morningstar SMID Moat ETF (SMOT) charges an expense ratio of 0.49% and trades on the Cboe, according to a company statement. The new fund follows the Morningstar US Small-Mid Cap Moat Focus Index, which tracks the performance of small and midcap companies that have long-term advantages in their industry.

SMOT joins a suite of moat investing strategies from the asset manager, including the VanEck Morningstar Wide Moat ETF (MOAT), the VanEck Morningstar International Moat ETF (MOTI) and the VanEck Morningstar Global Wide Moat ETF (MOTG)

"Launching SMOT is an exciting natural progression for us as we continue to build out our moat-focused fund family,” Brandon Rakszawski, director of product management at VanEck, said in the statement. 

The launch comes while equity markets are being roiled by rising interest rates, war in Eastern Europe and soaring inflation. The S&P 500 recently recorded its longest streak of quarterly declines since 2009. Meanwhile, the Russell Midcap Index has plummeted 20.8% year to date, according to MarketWatch, while the Russell Small Cap Completeness Index has tumbled 25.1%.  

VanEck said its approach remains steadfast.  

“We feel that small and midcap companies are often an overlooked area of the market. Despite the fact that there are far more SMID-cap companies than large cap companies in the U.S., they tend to represent a much smaller portion of investors’ portfolios,” Rakszawski added in a statement to ETF.com.  

Contact Shubham Saharanat[email protected]  

Shubham Saharan is a markets reporter at etf.com. Before joining the company, she reported for Bloomberg and the Financial Times. Saharan is a graduate of Barnard College of Columbia University.