Exchange Traded Funds (ETFs)

This ESG Fund Has a Wide Moat

The VanEck Morningstar ESG Moat ETF (BATS:MOTE) tracks an equal-weighted index of U.S. stocks perceived to have high fair value, sustainable competitive advantage, positive momentum and excellent environmental, social and governance (ESG) ratings.

MOTE is a passively managed fund which tracks an index that provides exposure to U.S. stocks of any market-capitalization size that are deemed “wide moat” companies (attractively priced stocks that have sustainable competitive advantages) with low ESG risk. The fund selects wide-moat companies using quantitative and qualitative factors while screening out those with severe or high ESG Risk Scores, as well as those viewed as controversial.

Eligible securities are then ranked by momentum to only include the top 80%. Each sector is capped at 10%. The index is equally weighted, divided into two equal sub-portfolios, which follow a staggered rebalance strategy. Half of the portfolio is rebalanced in June and the other in December.

The fund normally invests at least 80% of its total assets in securities that compose the fund’s benchmark index. The U.S. Sustainability Moat Focus Index provides exposure to attractively valued companies with long-term competitive advantages, while excluding those companies with high ESG risks. The fund is non-diversified.

Source: StockCharts.com

As with any opportunity, potential investors should conduct their own due diligence in deciding whether this fund fits their own individual investing needs and portfolio goals.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.