For the past few years, the VanEck Morningstar Wide Moat ETF (MOAT) has felt like a forgotten relic of a bygone investing era. Once upon a time, it was my favorite ETF, period. It stems from Warren Buffett’s preference for companies with wide moats – insulation from competition due to one of several factors, such as high switching costs, deep customer loyalty, etc.
However, while mega-cap tech hyperscalers were busy staging a vertical, historic melt-up, MOAT’s strategy — which explicitly hunts for undervalued companies with those sustainable competitive advantages — languished. At least in terms of relative performance to the SPDR S&P 500 ETF Trust (SPY) and especially to the Invesco QQQ Trust (QQQ).
