Why the VanEck Morningstar Wide Moat ETF (MOAT) Outperforms in a Fragmented Market

In an era defined by geopolitical fragmentation, inflationary pressures, and rapid technological disruption, the VanEck Morningstar Wide Moat ETF (MOAT)—now rebranded as the VanEck Morningstar Global Wide Moat ETF (MOTG)—has emerged as a standout performer. As of September 4, 2025, the ETF trades at $43.64 per share, reflecting its ability to weather macroeconomic headwinds while delivering durable returns. This resilience stems from its focus on companies with enduring competitive advantages—often termed “wide moats”—that insulate them from market turbulence. By analyzing the financial and strategic strengths of key holdings like Microsoft, BlackRock, and KLA Corp, we uncover why MOAT is a compelling choice for investors seeking defensive exposure in a fragmented global economy.

The Case for Wide Moats in a Volatile World

The concept of a “moat,” popularized by Warren Buffett, refers to a company’s ability to maintain profitability and market share despite competition. In 2025, as trade wars escalate and supply chains fragment, these moats have become more critical than ever. According to a report by BDO, 61% of global business leaders now prioritize resilience over growth, investing in AI, data infrastructure, and risk mitigation to navigate disruptions [2]. MOAT’s portfolio, weighted toward such durable businesses, aligns with this shift. For instance, during the 2024-2025 period, the ETF outperformed broader equity indices by leveraging its exposure to high-quality, low-volatility stocks [1].

Microsoft: A Tech Titan with Unshakable Foundations

Microsoft (MSFT) exemplifies the power of a wide moat. In fiscal year 2023, the company reported record revenue of $211 billion and operating income exceeding $88 billion, driven by its dominance in cloud computing and AI [1]. Its Azure platform and Microsoft Teams have become indispensable for enterprises, creating a sticky ecosystem that rivals struggle to replicate. Moreover, Microsoft’s integration of AI into productivity tools—such as Copilot—has unlocked new revenue streams while enhancing customer retention.

The company’s ESG initiatives further reinforce its resilience. Microsoft’s cloud-for-sustainability platform not only supports clients in meeting decarbonization goals but also opens avenues for growth in the $1.7 trillion ESG investment market [4]. Even as the broader tech sector faces regulatory scrutiny and geopolitical risks, Microsoft’s strong balance sheet and recurring revenue model ensure it remains a cornerstone of MOAT’s portfolio.

BlackRock: Navigating Capital Markets with Precision

BlackRock (BLK) is another pillar of MOAT’s strategy. The asset management giant has demonstrated remarkable adaptability in 2025, with revenue rising 14% and operating income up 23% year-over-year [3]. Its 2025 Global Outlook emphasizes a “pro-risk” stance toward U.S. equities, which it views as uniquely positioned to capitalize on AI and infrastructure spending [2]. This forward-looking approach has allowed BlackRock to outperform peers in a landscape marked by de-dollarization and levered position unwinds.

BlackRock’s competitive advantages extend beyond its financials. Its Aladdin platform, a risk-management tool used by institutional investors, has become a de facto standard in the industry, generating recurring fees and cross-selling opportunities. Additionally, the firm’s underweight stance on long-term Treasuries and focus on high-quality equities align with its 2025 strategy of balancing growth and risk mitigation [4]. These attributes make BlackRock a linchpin of MOAT’s defensive profile.

KLA Corp: Semiconductor Leadership in a High-Stakes Sector

KLA Corp (KLAC) underscores MOAT’s exposure to critical infrastructure. As a leader in semiconductor inspection and metrology, KLA benefits from the $1.2 trillion global semiconductor market, which is projected to grow at a 10% CAGR through 2034 [5]. In Q2 2024, the company reported $3.08 billion in revenue and a 26.8% net profit margin, reflecting its pricing power and operational efficiency [1]. Its expertise in wafer flatness measurement systems and e-beam inspection tools is indispensable for advanced manufacturing processes, including 3D NAND and FinFET technologies.

KLA’s resilience during downturns is further bolstered by its strong liquidity position. While direct data on its 2020-2024 liquidity ratios is limited, industry benchmarks suggest the company maintained robust short-term solvency amid supply chain disruptions [6]. This stability is crucial in a sector prone to cyclical volatility, ensuring KLA remains a reliable contributor to MOAT’s returns.

The Broader Macro Context: Why Wide Moats Matter

The fragmented market environment of 2025—marked by deglobalization, trade policy uncertainty, and AI-driven disruption—has amplified the value of wide-moat companies. As noted in BlackRock’s 2025 Midyear Outlook, immutable economic laws, such as the difficulty of rapidly reworking supply chains, create predictable short-term dynamics that favor durable businesses [7]. MOAT’s holdings, with their entrenched market positions and high margins, are uniquely positioned to thrive in this regime.

Conclusion: A Defensive Strategy for Uncertain Times

The VanEck Morningstar Wide Moat ETF’s outperformance in 2025 is no accident. By concentrating on companies like Microsoft, BlackRock, and KLA Corp—businesses with unassailable competitive advantages, strong margins, and strategic agility—MOAT offers a compelling solution for investors navigating a fragmented global economy. As trade tensions persist and technological innovation accelerates, the ETF’s focus on durability over speculation will likely continue to deliver resilient returns. For those seeking long-term stability without sacrificing growth potential, MOAT remains a standout choice.

Source:
[1] Microsoft 2023 Annual Report, [https://www.microsoft.com/investor/reports/ar23/index.html]
[2] BDO, Techtonic States 2025: The New Business Edge, [https://www.bdo.com/insights/press-releases/global-business-leaders-prioritize-resilience-as-the-new-business-edge]
[3] BLK DEF 14A & SEC Filings, [https://nz.finance.yahoo.com/sec-filing/BLK/0001308179-25-000388_2012383]
[4] BlackRock - Global Outlook 2025: Building the Transformation, [https://www.slideshare.net/slideshow/blackrock-global-outlook-2025-building-the-transformation/274266071]
[5] Global Wafer Flatness Measurement System Market 2024, [https://mobilityforesights.com/product/wafer-flatness-measurement-system-market]
[6] Advanced Micro Devices Inc. | Analysis of Liquidity Ratios, [https://www.stock-analysis-on.net/NASDAQ/Company/Advanced-Micro-Devices-Inc/Ratios/Liquidity?srsltid=AfmBOooEvcPsM2006-ePi2r6B8pAYD0t2nkkltdFp46SGBRFZjeosZkX]
[7] 2025 Midyear Investment Outlook | BII - BlackRock, [https://www.blackrock.com/us/individual/insights/blackrock-investment-institute/outlook]