Deutsche Bank said Thursday it has filed an SEC registration to issue exchange-traded notes [ETNs] tracking Morningstar indexes. The ETN, similar to an ETF, will list on NYSE Arca, and be distributed by Nuveen Investments and Merrill Lynch. The ETN, which tracks Morningstar's Wide Moat Focus Total Return Index, will trade under the symbol WMW, and is the first ETN to offer investors exposure to the proprietary index. Wide Moat stocks are businesses that have large competitive advantages, or 'wide moats' around them, which should give them an added measure of staying power and the ability to develop product lines with the constant threat of new entrants. Wide moat businesses often have one or more of the following characteristics: 1) Recurring revenue stream. 2) Low cost production. 3) Monopolistic market posture. 4) Strong franchise/branding. 5) The ability to raise prices. "The Index exposes investors to high-quality companies that consistently generate high returns on capital," Morningstar director of stock research Pat Dorsey said. Morningstar analysts assign moat ratings of Wide, Narrow, or None to the 2,000 stocks they cover. "When we evaluate a stock, one of the first things we examine is whether or not the company has a moat, because an enduring competitive advantage is essential for a company's -- and a shareholder's -- long-term success," Dorsey said.
Commentary: Ten Ways to Build Moats • Do Banks Have Moats? • New ETFs on Seeking Alpha
Stocks to watch: WMW, DB, JNC, MER, NYX, MORN
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