The Market Vectors Wide Moat ETF (MOAT), an exchange-traded fund providing exposure to US-listed companies with so-called “wide economic moats”, has surpassed $500 million in assets under management.

The fund provides exposure to companies with so-called “wide economic moats” – namely those companies able to demonstrate a sustainable competitive advantage. (© Photo copyright Antony McCallum)

Listed on the NYSE Arca in April 2012, the fund has reached the milestone less than two years after making its debut.

It is linked to the Morningstar Wide Moat Focus Index, a rules-based, equal-weighted index intended to offer exposure to the 20 most attractively priced companies with sustainable competitive advantages according to Morningstar’s equity research team.

Brandon Rakszawski, Product Manager for Market Vectors ETFs, the fund’s sponsor, noted Morningstar’s unique index approach as an attractive feature to investors.

“MOAT’s underlying index provides investors access to Morningstar’s proprietary economic moat and valuation research. The ETF structure is well-suited for this highly dynamic and concentrated index methodology and despite turnover of four to nine stocks out of 20 total holdings at each quarterly rebalance, MOAT distributed no capital gains in 2013,” said Rakszawski.

Morningstar’s wide-moat analysis, which the index is based on, seeks to identify companies that possess one or more sustainable competitive advantages. Morningstar’s proprietary valuation process then identifies the 20 most attractively priced wide-moat companies at the time of each quarterly rebalance.

Current constituents include firms such as Oracle, Accenture, Kinder Morgan, Compass Minerals, Spectra Energy, IBM, Ebay, Intuitive Surgical, Schlumberger and Express Scripts.

The fund has a net expense ratio of 0.49%.