VanEck Wide Moat ETF: Unpacking the 6% Dividend Yield

The VanEck Morningstar Wide Moat ETF (ASX: MOAT) has a trailing dividend yield of 5.99% after a $7.56 per unit dividend distribution on June 30. The ETF holds a concentrated portfolio of 60 US stocks with perceived wide economic moats, resulting in above-average returns. The dividend is funded by passing through dividends received from underlying portfolio and proceeds from portfolio rebalances.

Title: VanEck Morningstar Wide Moat ETF (ASX: MOAT) Delivers 5.99% Trailing Dividend Yield

The VanEck Morningstar Wide Moat ETF (ASX: MOAT) has recently announced a significant dividend distribution, resulting in a trailing dividend yield of 5.99%. This yield is particularly notable given the ETF's focus on a concentrated portfolio of 60 US stocks with perceived wide economic moats. The dividend, amounting to $7.56 per unit, was distributed on June 30, 2025.

The VanEck Morningstar Wide Moat ETF is an actively managed fund that does not track a major index like the S&P/ASX 200 Index. Instead, it holds stocks that possess significant competitive advantages, or "wide moats." These advantages can come in various forms, such as powerful brands, cost advantages, or products that consumers find difficult to avoid using [2].

The ETF's performance is a testament to its strategy. As of June 30, 2025, MOAT units have delivered an average return of 15.02% per annum over the past ten years. This consistent performance is a result of the companies in its portfolio, which include well-known brands like Boeing, Nike, Alphabet, and Caterpillar [2].

The dividend is funded through two primary methods. First, the ETF passes through any dividends it receives from its underlying portfolio. Second, it distributes the proceeds from portfolio rebalances. Over time, some shares in the portfolio may outperform others, leading to an imbalance in their weightings. The ETF rectifies this by buying more of the underperforming shares and selling the outperforming ones, distributing the proceeds from this process as a single annual dividend distribution [2].

While the recent dividend distribution is substantial, it is important to note that this process is not consistent. Investors should not assume that the high payout this month is the norm. Future dividend payments may vary significantly [2].

In conclusion, the VanEck Morningstar Wide Moat ETF offers investors an attractive dividend yield of 5.99% along with a history of above-average returns. Its focus on companies with wide economic moats makes it a compelling choice for investors seeking steady income and long-term growth.

References:
[1] https://www.fool.com.au/2025/07/25/invested-in-asx-moat-or-other-vaneck-etfs-its-dividend-day/
[2] https://www.fool.com.au/2025/07/29/does-the-vaneck-wide-moat-etf-really-have-a-6-dividend-yield-right-now/