The VanEck Morningstar Wide Moat ETF (MOAT) is experiencing price pressure due to several factors impacting its underlying assets. Otis Worldwide Corporation, a significant holding within the ETF, is facing challenges in the Chinese market, which is contributing to investor caution. Despite Otis's strong economic moat and high-margin recurring revenue, its exposure to foreign markets introduces currency risks and questions about long-term growth rates. This uncertainty is compounded by Otis's premium valuation, which may not be compelling enough for investors seeking outperformance, especially in a volatile market environment.
Additionally, the broader market conditions are influencing MOAT's performance. The ETF's comparison with the Schwab US Dividend Equity ETF (SCHD) highlights its lower year-to-date return of 16.11% compared to SCHD's 19.25%. This underperformance, coupled with a higher expense ratio, may be causing investors to reassess their positions in MOAT. The high correlation between MOAT and SCHD suggests that market movements affecting one are likely to impact the other, potentially increasing risk during downturns.
The VanEck Morningstar Wide Moat ETF (MOAT) is currently priced at $98.21, reflecting a 0.33% decrease from the previous close.