The VanEck Morningstar Wide Moat ETF has been a consistent outperformer over the past 10 years.
There are many approaches to building stock portfolios for the long term, but all of them require patience. And chasing last year’s best performers can hurt your long-term results, as Mark Hulbert explained.
And even if you are patient, a long-term active strategy may underperform broad indexes and the exchange-funds that track them. One reason for underperformance might be that the actively managed funds have higher expenses. Another reason is that the S&P 500 SPX has been so top-heavy, with the largest technology players dominating its performance during the bull market through 2021.
The last four companies listed above are also held by the Van Eck Morningstar Wide Moat ETF MOAT , but this fund uses a modified equal-weighted strategy as it is reconstituted and rebalanced every quarter. The fund was established in 2012. It tracks Morningstar’s Wide Moat Focus Index.Here’s a 10-year chart of the ETFs’ total returns:
The list is narrowed down for value. “A lot of investors want to own great companies, so they tend to trade at high valuations,” Rakszawski said. “So the strategy tends to go toward those that are underpriced at any time.”
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