MOAT: Great Concept, But Inadequate Implementation Delivers Negative Alpha
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The VanEck Morningstar Wide Moat ETF (MOAT) has underperformed due to high turnover, mechanical rebalancing, and a high expense ratio, leading to negative alpha and eroded NAV.
February 09, 2025 | 11:45 am
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NEGATIVE IMPACT
The VanEck Morningstar Wide Moat ETF has underperformed, delivering negative alpha due to high turnover, mechanical rebalancing, and a high expense ratio.
MOAT's strategy of focusing on companies with sustainable competitive advantages is undermined by high turnover and mechanical rebalancing, leading to higher trading expenses and potential front-running. Additionally, its high expense ratio and inability to capitalize on top picks contribute to its negative alpha, making it less attractive in the short term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100