VanEck Morningstar International Moat ETF (MOTI): A Smart Beta Approach to World ETFs Market

The VanEck Morningstar International Moat ETF (MOTI) has been making waves in the ETF industry since its debut on 07/13/2015. This smart beta exchange traded fund offers broad exposure to the World ETFs category of the market, providing investors with a unique opportunity to potentially outperform traditional market cap weighted indexes.

Smart beta ETFs, like MOTI, are designed to track non-cap weighted strategies based on specific fundamental characteristics. These indexes aim to select stocks that have a better chance of risk-return performance, offering investors a different approach to market efficiency.

Managed by Van Eck, MOTI has quickly amassed over $236.52 million in assets, making it one of the average sized ETFs in the World ETFs segment. The fund seeks to match the performance of the Morningstar Global ex-US Moat Focus Index, which tracks 50 attractively priced companies outside the U.S. with sustainable competitive advantages.

With an expense ratio of 0.58% and a 12-month trailing dividend yield of 3.08%, MOTI is on par with most peer products in the space. The ETF’s top holdings include companies like Brp Inc (DOO), Nice Ltd (NICE), and Sodexo Sa (SW), with the top 10 holdings accounting for about 22.02% of total assets under management.

In terms of performance and risk, MOTI has shown strong returns of about 6.20% year-to-date and 15.35% in the past year. With a beta of 0.83 and a standard deviation of 17.75%, the ETF is considered a medium risk choice in the space, effectively diversifying company-specific risk with about 78 holdings.

While MOTI is a reasonable option for investors seeking to outperform the World ETFs segment, there are other ETFs in the space worth considering, such as Vanguard Total International Stock ETF (VXUS) and Vanguard FTSE Developed Markets ETF (VEA). Investors looking for cheaper and lower-risk options may also explore traditional market cap weighted ETFs.

Overall, the VanEck Morningstar International Moat ETF (MOTI) offers investors a unique opportunity to access international companies with sustainable competitive advantages. With its smart beta approach and strong performance, MOTI is definitely a fund to keep an eye on in the ever-evolving ETF landscape.