With both the Australian and American stock markets continuing to break new ground and soar to fresh heights, it's been a bonanza for most Australian investors and ASX exchange-traded fund (ETF) owners. Both the S&P/ASX 200 Index (ASX: JXO) and the American S&P 500 Index (SP: .INX) have reset their record highs over the past month.
Just last week, the ASX 200 cracked the 8,400-point mark for the first time ever. Likewise, the S&P 500 broke above 6,000 points this November, an all-time first.
Whilst these highs have been good news for many ASX 200 shares, including Commonwealth Bank of Australia (ASX: CBA) and WiseTech Global Ltd (ASX: WTC), it has also been a boon to anyone who owns ASX ETFs.
ETFs of all stripes have also been hitting new record highs of late. That includes both index funds like the Vanguard Australian Shares Index ETF (ASX: VAS) and the iShares S&P 500 ETF (ASX: IVV), and thematic or active funds like the BetaShares Global Quality Leaders ETF (ASX: QLTY).
All of these ASX ETFs are sound investments and, in my view, are suitable for any long-term investor. However, I think investors should consider one star fund in particular right now. It's none other than the VanEck Morningstar Wide Moat ETF (ASX: MOAT).
A star ASX ETF
If you haven't heard of this ASX ETF, it is an actively managed fund that aims to give investors exposure to a concentrated portfolio of American companies. These stocks are selected on their perceived possession of a wide economic moat.
A 'moat' is a concept brought to the investing mainstream by legendary investor Warren Buffett. It refers to a permanent competitive advantage a company can possess. This can come in a few different forms, such as a strong trusted brand, a pricing advantage over rivals or else a product or service that customers find difficult to avoid paying for.
Buffett himself has said that these are the kinds of companies he likes to buy for Berkshire Hathaway's own portfolio.
We can see this selection criteria play out with a look at this ASX ETF's current portfolio. You'll see names like Walt Disney, Altria, Campbell Soup, Adobe and Nike in MOAT's present holdings.
It's my belief that these kinds of companies tend to thrive over long periods of time, not just when the markets are in a good mood (as they evidently have been this year).
MOAT units have returned an average of 14.81% per annum over the past five years. While this impressive performance is not guaranteed to continue, I believe this star ASX ETF will continue to be a great investment for the foreseeable future.
