The Moats / ESG ETF could be in the right place at the right time

The VanEck Morningstar ESG Pit AND F (MOTE) is just over two months old, but it is no exaggeration to say that it is a credible and compelling addition to the burgeoning environmental, social and governance landscape (ESG) exchange-traded funds.

it helps that MOTE is the ESG respond to a well established AND F – the VanEck Vectors Morningstar Wide Moat AND F (PIT A-). However, MOTE will be able to defend itself on its own because it happens when investors aspire to new ESG concepts and put capital to work for this purpose.

“Global ESG assets are on track to exceed $ 53 trillion by 2025, according to Bloomberg Intelligence, which represents more than a third of the $ 140.5 trillion in total assets under management forecast, ”notes deVere Group.

MOTE tracks the Morningstar US Sustainability Moat Focus Index, which attempts to identify broad-gap companies that are trading at attractive valuations while performing impressive. ESG credits. In other words, MOTE investors potentially benefit from three advantages under one roof: significant competitive advantages, attractive valuations and ESG.

Obviously, MOTE is a new AND F, it is therefore not yet relevant to judge it on the basis of incoming flows. However, it could be a welcome addition to this category as advisers and investors become more comfortable adopting ESG funds.

“Previously, ESG investments were often seen as a ‘quirk’ or ‘nice to have’, said deVere Group CEO Nigel Green. “But now we believe they should be part of everyone’s investment portfolio for several key reasons. “

Prove that the combination of wide moats and solids ESG partitions is an exclusive territory, MOTE is a concentrate AND F with only 60 farms. However, the concentration risk is mitigated to some extent as none of the fund components exceeds a weighting of 3.22%, and the top 10 holdings combine for a tolerable total of 29.43%.

Without surprise, MOTE is overweight technology stocks with an allocation of 31.1%. Industrials and Consumer Discretionary sectors combine for 30%, while Financials and Consumer Staples combine for 21.7%. There are no energy, real estate or utility stocks in MOTE. Overall, the fund could resonate with ESG-hungering investors.

“ESG represents a revolution in investment strategy itself. A radical change has taken place in the behavior of companies. How companies approach ESG factors and the value they place on them over other considerations has already changed forever. the ESG the themes are already entrenched in the global economy as it will only grow in the years to come – and, of course, investors should embrace the concept of having an early advantage, ”adds Green.

For more news, information and strategy, visit the Beta Beyond Basic channel.

Comments are closed.