VanEck Morningstar SMID Moat ETF

VanEck Morningstar SMID Moat ETF (SMOT) tracks the Morningstar US Small-Mid Cap Moat Focus Index. The index holds about 110 small and mid-sized companies that Morningstar's analysts believe have lasting competitive advantages and trade at attractive prices compared with Morningstar's fair value estimates. Money is spread widely: the top 10 holdings made up 14.8% of assets as of June 30, 2026. Its 0.49% expense ratio is well above the 0.28% average of similar funds.

• Over the year to Oct 27, 2026, SMOT returned +9.7%, 5th of 7 among similar funds.
• Its worst full calendar year was 2025 (+6.5%); its best was 2023 (+17.3%).
• The deepest fall in its price history was 23.4% (Nov 25, 2024 to Apr 8, 2025), recovered by Dec 11, 2025.

As of Jun 30, 2026, the fund held 110 securities; the ten largest made up 14.82% of assets.

• Over the three months to Jun 30, 2026, investors withdrew a net $16.8M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +6.14%, +2.18%, +1.87%.

SMOT is an index fund. It doesn't try to beat its benchmark, and it normally puts at least 80% of its assets in the stocks of the Morningstar US Small-Mid Cap Moat Focus Index. The index starts from the Morningstar US Small-Mid Cap Index, which covers US companies between the 70% and 97% marks of the market's total value. From that group, Morningstar keeps only companies with a "moat," meaning a lasting edge over rivals. A wide moat is expected to last at least 20 years and a narrow moat at least 10. Analysts judge this by looking at returns on invested capital compared with the cost of capital, and at strengths such as switching costs, brands, cost advantages and network effects.

Next, a momentum screen drops the 20% of moat stocks with the weakest 12-month price change. From what's left, Morningstar picks the stocks that look cheapest compared with its fair value estimates. As of December 31, 2025, the index held 106 stocks, with company sizes ranging from about $4.30 billion to $83.08 billion.

The index is split into two equally weighted halves. Each half is rebuilt twice a year, on alternating quarters. Portfolio turnover, a measure of how much of the fund is traded in a year, was 77%. As of September 30, 2025, industrials, technology, consumer discretionary and health care each made up a large share of the fund.

• SMOT charges 0.49% a year, versus an average of 0.28% for the similar funds below (6th of 7, cheapest first).
• Of that, 0.45% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $50 in the first year and $616 over 10 years (assuming a 5% annual return).

It is a concentrated bet on small and mid-sized companies chosen by value, with a higher fee than broad funds, so it fits better beside a core holding than in place of one.

SMOT could add exposure to smaller US companies with a value tilt, which differs from a large-company index. Its record is short. The fund launched October 4, 2022, so it has no history through the 2008, 2020 or 2022 market crashes. Its deepest drop was 23.4%, from November 25, 2024 to April 8, 2025, and it took about 8 months to recover, by December 11, 2025. Someone who had to sell shares near that low would have locked in a large loss. It hasn't had a losing calendar year yet. Its weakest year was 2025, at 6.48%. The fund pays income once a year, and the yield was 1.26% as of October 27, 2026. Costs are 0.49% a year, or $50 in the first year on $10,000 in the SEC's standard example. Past results don't predict future ones, and a retirement plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).