The US equity Morningstar® Wide Moat Focus IndexTMMOAT Index lagged the S&P 500 Index in May (0.97% vs. 2.20%). Despite this underperformance, the US Moat Index remains ahead of the S&P 500 Index year-to-date (10.68% vs. 8.66%). VanEck's Morningstar Wide Moat ETF (ASX code: MOAT) tracks the MOAT Index.
Performance attribution: Ups and downs
McKesson Corp (MCK US, +17.93%) rebounded in May after facing headwinds in previous quarters. The firm posted solid results for its fiscal fourth quarter which Morningstar equity analysts believe reaffirms their view of the company’s long-term fundamentals. MCK US was the top performer in the US MOAT Index in May and remained undervalued in Morningstar’s view at month end. In terms of sector performance in May, information technology was the top contributor to the US MOAT Index’s performance, with all five sector constituents posting positive performance. By contrast financials, consumer staples, real estate, consumer discretionary and materials sectors all detracted from US MOAT Index performance in May and were the reason for the Index’s underperformance relative to the S&P 500 Index. Twenty-First Century Fox, Inc. (FOXA US, -11.20%) was the worst performing index constituent in May, primarily due to disappointing fiscal third quarter results driven by its film studio unit.
This commentary is not
intended as a recommendation to buy or to sell any of the named securities.
Holdings will vary for the MOAT and the MOAT Index.
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