For the Month Ending April 30, 2018
U.S. moat companies rebounded in April, with the U.S.-oriented Morningstar® Wide Moat Focus IndexSM (MWMFTR, or "U.S. Moat Index") leading the broad U.S. market as represented by the S&P 500® Index (1.47% vs. 0.38%, respectively). International moats failed to outperform the broad international markets for the first month since January 2018. Represented by the Morningstar® Global ex-US Moat Focus IndexSM (MGEUMFUN, or "International Moat Index"), international moats trailed the MSCI All Country World Index ex-USA in April (1.15% vs. 1.60%, respectively).
International Moats: Industrials Leaders Face Setbacks
Two industrials firms led detractors in the International Moat Index for the month. Japan's Fanuc Corp. (OTCPK:FANUY, 6954 JP, -15.07%) posted strong fiscal 2017 results in April, but weak 2018 guidance sparked a sell-off. The automation and robotics firm expects demand from the IT and smartphone industries to impact its revenue and profitability in the short term. Morningstar analysts have reduced the company's fair value estimate but maintain its wide moat rating. German forklift manufacturer Kion Group AG (OTCPK:KIGRY, KGX GR, -10.11%) also struggled, impacted by U.S. dollar exposure in first-quarter results as well as a decline in year-over-year orders. However, Morningstar analysts note that forklift demand in North America remains robust. United Kingdom, Singapore, and the Netherlands were the top three contributing countries, with standout companies including Philips (PHG, PHIA NA, +10.99%) and Genting Singapore PLC (OTCPK:GIGNF, GENS SP, +9.12%) helping to offset some of the negative performance.
U.S. Domestic Moats: Healthcare's Health Recovers
The healthcare sector became a boon for the U.S. Moat Index in April following a period of negative influence on the index. The sector overweight was the biggest contributor to index performance for the month, led by CVS Health Corp. (CVS, +13.11%). CVS reported a strong first quarter shortly after the end of the month, which had followed steep declines in the company's stock price earlier in the year. The company reported increases in revenue across all segments, as investors are now looking forward to the expected closing of its acquisition of Aetna (NYSE:AET), according to Morningstar analysts. McKesson Corp. (MCK, +10.89%) and Express Scripts Holding Co. (ESRX, +9.58%) were two other healthcare standouts. Materials companies also contributed positively to U.S. Moat Index returns, while consumer staples were the main sore spot. PepsiCo Inc. (PEP, -7.52%), Procter & Gamble Co. (PG, -7.88%), and The Hershey Co. (HSY, -7.09%) all struggled.
Monthly Index Returns
(%) Month Ending 4/30/18
1-Year Index Returns
(%) As of 4/30/18
Top/Bottom Index Performers
(%) Month Ending 4/30/18
Wide Moat Focus Index (MWMFTR)
Top 5 Index Performers
|CVS Health Corp.||13.11|
|Compass Minerals International Inc. (CMP)||11.61|
|Express Scripts Holding Co.||9.58|
|V.F. Corp. (VFC)||9.11|
|Bristol-Myers Squibb Company (BMY)||-17.05|
|Allergan PLC (AGN)||-8.70|
|L Brands Inc. (LB)||-8.64|
|Microchip Technology Inc. (MCHP)||-8.43|
|Procter & Gamble Co.||-7.88|
View MOAT's current constituents
View MWMZX's current constituents
Global ex-US Moat Focus Index (MGEUMFUN)
|Royal Philips NV (OTCPK:RYLPF)||10.99|
|Genting Singapore PLC||9.12|
|Grupo Aeroportuario del Centro Norte SAB de CV (OMAB)||8.58|
|Orange SA (ORAN)||7.72|
|Meggitt PLC (OTCPK:MEGGF)||7.42|
|Kion Group AG||-10.11|
|Svenska Handelsbanken A (OTCPK:SVNLF)||-9.91|
|Sina Corp. (SINA)||-8.37|
|Mobile TeleSystems PJSC (MBT)||-8.00|
As of 3/16/18
Wide Moat Focus Index (MWMFTR)
|McDonald's Corp.||MCD US|
|Procter & Gamble||PG US|
|General Mills Inc.||GIS US|
|Dominion Energy Inc.||D US|
|Campbell Soup Co.||CPB US|
|Hershey Foods Corp.||HSY US|
|Cheniere Energy Inc.||LNG US|
|Microchip Technology Inc.||MCHP US|
|Comcast Corp. A||CMCSA US|
|Franklin Resources Inc.||BEN US|
|PepsiCo Inc.||PEP US|
|Visa Inc. A||V US|
|V.F. Corp.||VFC US|
|Polaris Industries Inc.||PII US|
|The Bank of New York Mellon Corp.||BK US|
|Veeva Systems Inc. A||VEEV US|
|United Technologies Corp.||UTX US|
|TransDigm Group||TDG US|
|CBRE Group Inc.||CBG US|
|Bristol-Myers Squibb||BMY US|
|Emerson Electric Co.||EMR US|
|Patterson Cos. Inc.||PDCO US|
View Latest MOAT Reconstitution Report
View MOAT's list of current constituents
Global ex-US Moat Focus Index (MGEUMFUN)
|Beijing Enterprises Holdings Ltd. (OTC:BJINF)||China|
|LINE Corp. (OTC:LIN)||Japan|
|GEA AG (OTCPK:GEAGF)||Germany|
|Unilever (UL)||United Kingdom|
|Vodafone Group (VOD)||United Kingdom|
|Grupo Aeroportuario del Pacifico (PAC)||Mexico|
|Sun Hung Kai Properties Ltd. (OTCPK:SUHJF)||Hong Kong|
|Kion Group AG||Germany|
|SK Telecom Co. Ltd. (SKM)||South Korea|
|Genting Singapore Plc||Singapore|
|Koninklijke KPN NV (OTCPK:KKPNY)||Netherlands|
|Beijing Capital International Airport Co. Ltd. (OTCPK:BJCHF)||China|
|Brambles Industries Ltd. (OTCPK:BMBLF)||Australia|
|Banco Bilbao Vizcaya Argentaria SA (BBVA)||Spain|
|Rolls-Royce Holdings Plc (OTCPK:RYCEF)||United Kingdom|
|CapitaLand Mall Trust REIT (OTCPK:CPAMF)||Singapore|
|Unicharm Corp. (OTCPK:UNICY)||Japan|
|Capitaland Ltd. (OTCPK:CLLDF)||Singapore|
|Symrise AG (OTCPK:SYIEF)||Germany|
|Svenska Handelsbanken A||Sweden|
|LafargeHolcim Ltd. (OTCPK:HCMLF)||Switzerland|
|Hong Kong Land Hldgs Ltd.||China|
|Smiths Group (OTCPK:SMGKF)||United Kingdom|
|Grifols SA (GRFS)||Spain|
|Seven & I Holdings Co Ltd. (OTCPK:SVNDY)||Japan|
|Kubota Corp. (OTCPK:KUBTY)||Japan|
|Cameco Corp. (CCJ)||Canada|
|Canadian Pacific Railway Ltd. (CP)||Canada|
|Enbridge Inc. (ENB)||Canada|
|Cemex SA CPO (CX)||Mexico|
|America Movil SAB de CV L (AMX)||Mexico|
|Embraer S.A. (ERJ)||Brazil|
|Airbus SE (OTCPK:EADSF)||France|
|Luxottica Group SpA (OTCPK:LUXTY)||Italy|
|Crown Resorts Ltd. (OTCPK:CWLDF)||Australia|
|Sonic Healthcare Ltd. (OTCPK:SKHCF)||Australia|
|Westpac Banking Corp. (WBK)||Australia|
|AMP Ltd. (OTCPK:AMLTF)||Australia|
|Commonwealth Bank of Australia (OTCPK:CBAUF)||Australia|
|QBE Insurance Group Ltd. (OTCPK:QBEIF)||Australia|
|Magellan Financial Group Limited||Australia|
|Inditex SA (OTCPK:IDEXY)||Spain|
|Telefonica SA (TEF)||Spain|
|MGM China Holdings Ltd. (OTCPK:MCHVF)||Hong Kong|
|Roche Hldgs AG Ptg Genus (OTCQX:RHHBY)||Switzerland|
|Elekta AB (OTCPK:EKTAF)||Sweden|
|Sina Corp. (Caymans)||China|
|ENN Energy Holdings Ltd. (OTCPK:XNGSF)||China|
|DBS Group Holdings (OTCPK:DBSDF)||Singapore|
|Overseas-Chinese Banking (OTCPK:OVCHF)||Singapore|
|KBC Group NV (OTCPK:KBCSF)||Belgium|
View Latest MOTI Reconstitution Report
View MOTI's list of current constituents
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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.
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 and Morningstar® Global ex-US Moat Focus IndexSM were created and are maintained by Morningstar, Inc. Morningstar, Inc. does not sponsor, endorse, issue, sell, or promote the VanEck Vectors Morningstar Wide Moat ETF or VanEck Vectors Morningstar International Moat ETF and bears no liability with respect to the ETFs or any security. Morningstar® is a registered trademark of Morningstar, Inc. Morningstar Wide Moat Focus Index and Morningstar Global ex-US Moat Focus Index are service marks of Morningstar, Inc.
The Morningstar® Wide Moat Focus IndexSM consists of U.S. companies identified as having sustainable, competitive advantages and whose stocks are attractively priced, according to Morningstar.
The Morningstar® Global ex-US Moat Focus IndexSM consists of companies outside of the U.S. 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 industrial, utility, financial and transportation sector; as an Index, it is unmanaged and is not a security in which investments can be made.
The S&P 500® Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Van Eck Associates Corporation. Copyright © 2018 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC's indices please visit www.spdji.com. S&P is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third-party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third-party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.
The MSCI All Country World Index ex USA Index captures large and mid-cap representation across 22 of 23 developed markets countries (excluding the U.S.) and 24 emerging markets countries.
Effective June 20, 2016, Morningstar implemented several changes to the Morningstar® Wide Moat Focus IndexSM 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.
Effective June 20, 2016, Morningstar implemented several changes to the Morningstar® Global ex-US Moat Focus IndexSM construction rules. Among other changes, the index increased its constituent count from 50 stocks to at least 50 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.
An investment in VanEck Vectors Morningstar Wide Moat ETF (MOAT®) may be subject to risks which include, among others, investing in the health care, consumer discretionary, industrials, financial services sectors, medium-capitalization companies, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified, and concentration risks, which may make these investments volatile in price or difficult to trade. Medium-capitalization companies may be subject to elevated risks. The Fund's assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors.
An investment in VanEck Vectors Morningstar International Moat ETF (MOTI®) may be subject to risks which include, among others, equity securities, investing in the financial services, health care, industrials and telecommunication sectors, medium-capitalization companies, foreign securities, foreign currency, emerging market issuers, special risk considerations of investing in Asian and European issuers, depositary receipts, cash transactions, market, operational, high portfolio turnover, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified, and concentration risks, which may make these investments volatile in price or difficult to trade. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Medium-capitalization companies may be subject to elevated risks. The Fund's assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors.
You can lose money by investing in the VanEck Morningstar Wide Moat Fund (the "Fund"). Any investment in the Fund should be part of an overall investment program rather than a complete program. An investment in the Fund may be subject to risks which include, among others, investing in concentration, equity securities, index tracking and data, consumer discretionary, financial services, the health care, industrials, information technology, underlying fund, market, medium-capitalization companies, new fund, non-diversification, operational, portfolio turnover and replication management risks, which may make these investments volatile in price or difficult to trade. Medium-capitalization companies may be subject to elevated risks. The Fund's assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors.
ETF shares are not individually redeemable and will be issued and redeemed at their Net Asset Value (NAV) only through certain authorized broker-dealers in large, specified blocks of shares called "creation units" and otherwise can be bought and sold only through exchange trading. Shares may trade at a premium or discount to their NAV in the secondary market. You will incur brokerage expenses when trading ETF shares in the secondary market. Past performance is no guarantee of future results.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider a Fund's investment objective, risks, charges and expenses carefully before investing. To obtain a prospectus and summary prospectus for VanEck Funds and VanEck Vectors ETFs, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus for VanEck Funds and VanEck Vectors ETFs carefully before investing.