Market Vectors ETFs has launched a new fund, the Market Vectors Morningstar Wide Moat Research ETF (NYSE Arca: MOAT), which follows a Morningstar index designed to track companies that have distinct competitive advantages, called moats, for more than 20-years.
“We believe that competitive advantages, ‘economic moats,’ add intrinsic value, and we rigorously assess the competitive position of the companies we cover,” said Paul Larsen, chief equities strategist at Morningstar during a Wednesday morning conference call presenting the new fund.
The ETF aims to replicate as closely as possible, before fees and expenses, the price and yield performance of the Morningstar Wide Moat Focus IndexSM (MWMFTR).
When looking for so-called “wide moat companies,” Morningstar analysts reportedly try to identify companies that possess one or more sustainable, long-term competitive advantages. These companies must also show promise of high returns on invested capital relative to their cost of capital.
The MOAT ETF is Market Vector’s 48th exchange traded fund, and has an annual net expense ratio of 49 basis points, which is capped until at least May 1, 2013. The cap excludes certain expenses, such as interest.