VanEck Morningstar ESG Moat ETF

VanEck Morningstar ESG Moat ETF (MOTE) tracks the Morningstar US Sustainability Moat Focus Index: US companies Morningstar judges to have lasting competitive advantages and attractive prices. It also drops companies with high environmental, social and governance (ESG) risk, plus tobacco, thermal coal and weapons businesses. It charges 0.50% a year after a fee waiver, near the 0.49% average of similar VanEck funds, and had just $15.2 million in assets as of June 30, 2025.

• Over the year to Oct 27, 2026, MOTE returned 0.0%, 4th of 5 among similar funds.
• Its 5-year annualized return was +2.4%.
• Its worst full calendar year was 2022 (-18.7%); its best was 2023 (+18.3%).
• The deepest fall in its price history was 28.1% (Nov 16, 2021 to Oct 14, 2022), recovered by Mar 21, 2024.

As of Jun 30, 2025, the fund held 54 securities; the ten largest made up 26.37% of assets.

By sector

• Over the three months to Jun 30, 2025, investors added a net $8.2M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -2.70%, +4.09%, +2.60%.

MOTE is a passive fund: it tries to match the Morningstar US Sustainability Moat Focus Index, not beat it. The index starts from a Morningstar index covering about 97% of US stock market value. Morningstar analysts pick out “wide moat” companies, meaning businesses with lasting competitive advantages. They check whether a company's returns on capital beat its cost of capital, and look for strengths such as brands, patents, customer switching costs and network effects. The index targets those that Morningstar's cash-flow-based valuation model rates as attractively priced.

Next, the index drops companies with a high or severe environmental, social and governance (ESG) risk rating from Morningstar's Sustainalytics, which measures how exposed a company's value is to those issues. It also excludes tobacco producers, controversial weapons and civilian firearms businesses, thermal coal companies, firms with over 10% of revenue from oil and gas, and those with a severe controversy in the past three years or UN Global Compact breaches.

The index is split into two equally weighted halves. Each is rebuilt and rebalanced once a year, one in June and the other in December, so each review reshapes half the portfolio. As of June 30, 2025, the fund held 54 stocks, none above 3% of assets; Estée Lauder, Walt Disney and Allegion led at about 2.8%, 2.8% and 2.7%.

• MOTE charges 0.5% a year, versus an average of 0.49% for the similar funds below (4th of 5, cheapest first).
• Of that, 0.45% is the management fee; the rest covers other fund expenses.
• The fee includes a 1.36% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $51 in the first year and $2,068 over 10 years (assuming a 5% annual return).

As of June 30, 2025, it held 54 stocks picked by Morningstar's moat, valuation and ESG screens and had just $15.2 million in assets, making it a narrow tilt rather than a broad core fund.

MOTE could add a tilt toward ESG-screened companies with strong competitive positions, but its short history includes a sharp fall. Launched in October 2021, it has no record from the 2008 or 2020 crashes. In the 2022 bear market it fell 26.6% between January 4 and October 12, 2022, and 2022 was its worst calendar year, down 18.7%. Its deepest drop, 28.1% from November 2021 to October 2022, took about 17 months from the low to recover. Someone who had to cash out near that low would have locked in a steep loss.

It paid no distributions in the 12 months to October 27, 2026, so it supplied no income. It charges 0.50% after a fee waiver; the SEC's $10,000 cost example climbs from $51 after one year to $2,068 after 10. Past results don't predict future ones, and any plan should weigh the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.