Designed to provide broad exposure to the Foreign Large Value ETF category of the market, the VanEck Morningstar International Moat ETF (MOTI – Free Report) is a smart beta exchange traded fund launched on 07/13/2015.
What are smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you’re the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors–think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting–not all have been able to deliver first-rate results.
Fund sponsor and index
The fund is managed by Van Eck. MOTI has been able to amass assets over $202.56 million, making it one of the average sized ETFs in the Foreign Large Value ETF. This particular fund seeks to match the performance of the Morningstar Global ex-US Moat Focus Index before fees and expenses.
The Morningstar Global Markets ex-US Wide Moat Focus Index tracks the overall performance of 50 attractively priced companies outside the U.S. with sustainable competitive advantages.
Cost and other expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF’s expense ratio.
Annual operating expenses for this ETF are 0.58%, making it on par with most peer products in the space.
MOTI’s 12-month trailing dividend yield is 3.12%.
Sector exposure and top holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund’s holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Yaskawa Electric Corpaccounts for about 3.43% of the fund’s total assets, followed by Barry Callebaut Ag (BARN) and Taiwan Semiconductor Manufacturing Co L.
Its top 10 holdings account for approximately 28.39% of MOTI’s total assets under management.
Performance and risk
The ETF has added about 3.27% and is up roughly 29.65% so far this year and in the past one year (as of 01/08/2026), respectively. MOTI has traded between $29.35 and $38.97 during this last 52-week period.
MOTI has a beta of 0.67 and standard deviation of 16.05% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 60 holdings, it effectively diversifies company-specific risk .
Alternatives
VanEck Morningstar International Moat ETF is a reasonable option for investors seeking to outperform the Foreign Large Value ETF segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard International High Dividend Yield ETF (VYMI) tracks FTSE All-World ex US High Dividend Yield Index and the Schwab Fundamental International Equity ETF (FNDF) tracks Russell RAFI Developed ex US Large Co. Index (Net). Vanguard International High Dividend Yield ETF has $15.03 billion in assets, Schwab Fundamental International Equity ETF has $19.93 billion. VYMI has an expense ratio of 0.17% and FNDF changes 0.25%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Foreign Large Value ETF
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Source: https://www.fxstreet.com/news/is-vaneck-morningstar-international-moat-etf-moti-a-strong-etf-right-now-202601081320
