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Post by gman57 on Jul 7, 2023 15:20:31 GMT
When someone posts a fund I immediately compare it to VTSAX (total us stock) or VFIAX (Sp500). Very few beat them over time (10+ years) but someone recently posted a buy of MOAT and there was a comment about how it doesn't get any love on this forum. Well, compare I did and it looks good. Any others?
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Post by uncleharley on Jul 7, 2023 16:17:21 GMT
gman57, Thank You for the tip. A very quick look at indicates it is highly correlated to the S&P 500 but may outperform the S&P 500 over time. I need to look further at it.
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dave
Ensign
Posts: 8
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MOAT
Jul 7, 2023 17:39:24 GMT
Post by dave on Jul 7, 2023 17:39:24 GMT
I bought MOAT a little over 10 years with a cost basis of around $22, without reinvesting dividends. I didn't compare returns until I read this thread. Looks like I made a good decision. I thought the premise was good. MOAT is now about 5% of my portfolio. Dave
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MOAT
Jul 7, 2023 18:40:24 GMT
Post by Fearchar on Jul 7, 2023 18:40:24 GMT
Not much difference between VTSAX and VTI except for slightly lower expense ratio. Observe following tables comparing MOAT to VOO, JQUA and VTI. Portfolio wise, JQUA has superior book value growth rate. as well as Cash Flow Growth, Sales Growth and Historical Earnings growth. MOAT has a negative growth rate in cash flow.... That's not good! VOO does do best with long term earnings, but is only one of the measures. JQUA has the highest price to book, but notice that its turnover is much lower than MOAT and its earnings yield is nearly the same. A little bit less volatility too.
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MOAT
Jul 7, 2023 18:41:04 GMT
Post by anitya on Jul 7, 2023 18:41:04 GMT
It is 4% of my PV - I probably will add to it in the near future. I wanted something idiosyncratic to SPY and I had settled on this.
Note that M* has a lot of ETFs but this is the only one that does well against its benchmark. The last time I checked all the other ones from M* sucked. So, it is not, unlike SPY, a buy and forget investment.
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Post by steelpony10 on Jul 7, 2023 18:49:34 GMT
gman57 , Well it might bother some that this ETF is so concentrated in 50+? large cap U.S. stocks and turns over about half of those per year based on their metrics. But you are correct it does seen to have superior results since inception then the S&P so it may appeal to younger spend down investors who have time to recover equity values affected by many unknowns outside managements control. An investor should probably add more positions in areas they are missing though since it lacks any diversity. Now one has to factor in those results and charges. In retirement I lean towards safety in numbers and instant U.S. diversity (VTI) at a low cost and less personal holdings which I feel is easier for a survivor to deal with. We receive most of our income from other investments so the possible small yearly TR difference, if one has a long term, would not be a factor for us.
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MOAT
Jul 7, 2023 18:53:59 GMT
Post by anitya on Jul 7, 2023 18:53:59 GMT
Fearchar, Thanks for pulling the information together. Where did you pull the info from? Why is the as of date for the market indices May 31? We know June was a bumper month for those. M* has info for those as of Jul 05. If you are redoing, perhaps move the JQUA column next to MOAT. Negative cash flow growth surprised me but can not argue with data! Thanks
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MOAT
Jul 7, 2023 21:15:20 GMT
Post by Fearchar on Jul 7, 2023 21:15:20 GMT
Here's the 10 year chart for MOAT. Notice, how it has generally followed the index very closely. YTD has been an exception and I see little reason to suspect that to continue on very far into the future. 2015 was lousy, while 2016 was a rebound year. However nothing remarkable prior to 2015 and not much after 2016 until this year.
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Post by anitya on Jul 7, 2023 21:18:05 GMT
Fearchar, MOAT changed its methodology in mid year 2016.
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Post by Chahta on Jul 7, 2023 23:31:34 GMT
When someone posts a fund I immediately compare it to VTSAX (total us stock) or VFIAX (Sp500). Very few beat them over time (10+ years) but someone recently posted a buy of MOAT and there was a comment about how it doesn't get any love on this forum. Well, compare I did and it looks good. Any others? I agree. I ran PV backtest and it did beat VTI in all categories except SD. It sure looks like a contender. But for those of us wanting pure income VTI does better.
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Post by gman57 on Jul 8, 2023 1:39:03 GMT
When someone posts a fund I immediately compare it to VTSAX (total us stock) or VFIAX (Sp500). Very few beat them over time (10+ years) but someone recently posted a buy of MOAT and there was a comment about how it doesn't get any love on this forum. Well, compare I did and it looks good. Any others? I agree. I ran PV backtest and it did beat VTI in all categories except SD. It sure looks like a contender. But for those of us wanting pure income VTI does better. True --- it only pays a div once a year so has to be a long term hold.
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Post by Norbert on Jul 8, 2023 8:14:54 GMT
View AttachmentHere's the 10 year chart for MOAT. Notice, how it has generally followed the index very closely. YTD has been an exception and I see little reason to suspect that to continue on very far into the future. 2015 was lousy, while 2016 was a rebound year. However nothing remarkable prior to 2015 and not much after 2016 until this year. Just want to point out that the "index" you refer to is the Morningstar US Large-Midcap index. Comparing MOAT to the S&P 500 and PRWCX since 2016 paints a different, more positive picture:
(Click to enlarge.)
MOAT is driven by the Morningstar Wide Moat Focus Index. The strategy is to invest in companies with sustainable competitive advantages that are also attractively priced, as defined using M* fair value estimates.
MOAT looks like a decent core holding to me.
N.
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MOAT
Jul 8, 2023 13:22:46 GMT
Post by Fearchar on Jul 8, 2023 13:22:46 GMT
Norbert, Thank-you for pointing out the "index" that Morningstar uses. I took a look at the efficient frontier analysis diagram for JQUA, MOAT, VTI and VOO. Optimal mix was 55.56% MOAT 44.44% JQUA using historical data over the Jan 2018 to June 2023 period. VTI and VOO were left out. Generally, investors are uncomfortable with the high turnover that some funds such as MOAT has. However, there is a benefit too as they can be more adaptable to changing conditions.
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MOAT
Jul 8, 2023 13:41:21 GMT
Post by Fearchar on Jul 8, 2023 13:41:21 GMT
Here is a much broader efficient frontier analysis map using 10 different ETFs. Analysis constrained by JQUA between Dec 2017 to June 2023. The 10 funds included including some statistics: and what the efficient frontier looks like:
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Post by retiredat48 on Jul 8, 2023 16:32:08 GMT
Good discussion, folks... Fearchar ,...is the above efficient frontier chart simply confirming that if one wants more total return, they usually have to accept more standard deviation, or volatility, in portfolios? Get stability from fixed income allocations; better total returns from the stock side. Disclosure...my largest holding is FSPTX Fido Tech Sector Fund. I still sleep at night. R48
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MOAT
Jul 8, 2023 19:02:25 GMT
Post by Fearchar on Jul 8, 2023 19:02:25 GMT
retiredat48 , No; the way I was presenting the efficient frontier theory could be somewhat misleading. Equity is just part of the picture. Here's a good link to more detailed information on the Efficient FrontierAnd here is the standard text book diagram showing the bigger picture: And here's a YouTube video with good discussion: MPT
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MOAT
Jul 8, 2023 21:14:10 GMT
Post by retiredat48 on Jul 8, 2023 21:14:10 GMT
Fearchar ,...fair enough. From my memories of studying the efficient frontier, they were generally "portfolio" based...that is, the combined stock/bond holdings, or if no bonds, then the stock fund holdings. Your link implies this "portfolio theme.". You are graphing where selected individual funds are falling on the curve...no? And none of the individual funds selected fall above the desired efficient frontier line. Just an observation. Interestingly, it has been a long time to see anyone discuss "efficient frontiers" on any forum. R48
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MOAT
Jul 9, 2023 0:45:45 GMT
Post by anitya on Jul 9, 2023 0:45:45 GMT
Here is a much broader efficient frontier analysis map using 10 different ETFs. Analysis constrained by JQUA between Dec 2017 to June 2023. The 10 funds included including some statistics: View Attachmentand what the efficient frontier looks like: View Attachment Fearchar , Am I seeing correctly that QQQ is the best risk-reward and that JQUA is better than MOAT (based on far below MOAT is relative to the efficient frontier)? I would not mind seeing a discussion about the benefits of adding a separate quality factor (e.g., JQUA) to a portfolio in addition to SPY as I always assumed cap weighting more or less subsumes quality. Implicit is that SPY is the anchor equity in most portfolios. It certainly is in mine (if I ignore QQQ) as I find myself comparing all new considerations against SPY. May be you guys use JQUA as a substitute for SPY, rather than in addition to. Thanks.
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Post by Fearchar on Jul 9, 2023 11:28:21 GMT
anitya , Yes; that's correct. Over the selected historical time period among the selected funds, QQQ had the highest Sharpe Ratio. However, it also had a very high standard deviation. Here are the top 4 funds ranked by Sharpe ratio: QQQ 0.792 OMFL 0.687 MOAT 0.665 JQUA 0.656 I noticed that I had used the Annual return setting for that analysis. Had I instead selected the Monthly return setting, JQUA would have just barely edged out MOAT. So, JQUA and MOAT are both very close to each other and of course future returns will vary from our recent past. Here's another efficient frontier map using a few other funds and historical monthly returns Dec 2017 to June 2023. Top 5 funds ranked by Sharpe ratio are: RPHIX 1.113 QQQ 0.791 JQUA 0.700 OMFL 0.699 MOAT 0.674 Efficient Frontier Diagram: and the statistics:
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