Risk Considerations Risk Considerations   
The Morningstar® Wide Moat Focus IndexTM is constructed using the 20 wide-moat stocks representing the best value as determined by the ratio of Morningstar’s estimate of fair value to the stock price.

Overview

The Morningstar Wide Moat Focus Target Volatility 5 Index is a subset of the Morningstar US Market Index, a broad market index representing 97% of US equity market capitalization. To qualify for inclusion in a Morningstar Wide Moat Target Volatility 5 Index, all US Market Index constituents must meet the following criteria:

  • Company is assigned a wide moat classification by a Morningstar analyst. 
  • Company is assigned a fair value price by a Morningstar analyst.
  • Company cannot be under review at time of stock assignment.
  • Target exposure is based on the ratio of the target volatility to the measured historic volatility. 
  • Target exposure is monitored daily, and is subject to both an exposure tolerance and a maximum exposure of 150.

Companies that are deemed to have a wide moat by Morningstar are believed to posses one or more sustainable, long-term competitive advantages and are believed to have high returns on invested capital relative to their cost of capital. Morningstar’s equity research team looks for such sustainable competitive advantages, or wide economic moats, as intangible assets, cost advantages, switching costs, network effect, and efficient scale. There is no guarantee that these returns are sustainable nor that these companies will maintain their long-term competitive advantages.


Economic Moat: The Five Sources of Sustainable Competitive Advantage


Eco Moat

Source: Morningstar

For more information, please refer to the Broker-Dealer Offerings page or consult the respective offering documents.

 

The Index is calculated and published by the Calculation Agent. The Calculation Agent uses its best efforts to ensure that the Index is calculated correctly. The Calculation Agent does not warrant the accuracy or completeness of any information contained herein. Irrespective of its obligations towards the Issuer, the Calculation Agent has no obligation to point out errors in the Index to third parties including but not limited to investors and/or financial intermediaries of the financial instrument. The calculation and publication of the Index by the Calculation Agent for the purpose of use in connection with the financial instrument does not constitute a recommendation by the Calculation Agent to invest capital in said financial instrument nor does it in any way represent an assurance or opinion of the Calculation Agent with regard to any investment in this financial instrument.

The material contained herein is for informational purposes only, designed to illustrate an index created by the Index Sponsor that implies an investment strategy achieved through exposure to particular underlying financial instruments. The information contained herein is for illustrative purposes only and is not meant to forecast, imply, or guarantee the future performance of any particular investment or financial product, which will vary. An investment cannot be made directly in an index. An index is an unmanaged statistical composite and index performance does not include payment of any sales charges, expenses or fees an investor would pay to purchase the underlining securities or any financial product that may be linked to the index. Such costs would lower performance.

Incapital does not warrant the accuracy or completeness of any information contained herein and provides no assurance that this information is, in fact, accurate. The information contained herein is subject to change without notice. Any representations, projections and comparisons contained herein may not reflect the opinions of Incapital and may not be accurate either now or at a future date. Consequently, you should not rely on such representations, projections, comparisons or other opinions when selecting any investment product or making a recommendation to a customer. Current and future economic and other market events concerning an investment product or an index may cause the information provided herein to be incorrect. Past performance is not indicative of future results and should never be relied upon in making an investment decision or recommendation. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Incapital explicitly disclaims any responsibility for product suitability or suitability determinations related to individual investors.

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Key Indices

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