The VanEck Morningstar Wide Moat ETF (ASX: MOAT) has rallied strongly recently.
So much so, it has gained around 10% since 22 April.
For many investors, that kind of surge would normally signal that it is too late to invest. But is that actually the case? Let's find out.
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A strategy built to uncover value
The VanEck Morningstar Wide Moat ETF isn't your typical fund. It holds a curated portfolio of US-listed companies that analysts believe possess sustainable competitive advantages (wide economic moats) and are trading at discounts to their fair value.
What sets this ASX ETF apart is that it rebalances regularly, meaning it adjusts its holdings to stay aligned with this strategy. Companies that become too expensive or lose their strategic edge are replaced — keeping the portfolio focused on quality businesses trading at attractive prices.
This process ensures the fund consistently leans into value with discipline, regardless of short-term market momentum.
Still value beneath the surface
Despite the recent rally, many of the MOAT ETF's key holdings are still trading well below their 52-week highs.
This includes names like Nike, Adobe, Merck, Huntington Ingalls, Walt Disney, and Constellation Brands.
For example, Adobe has been expanding into AI and marketing automation but is still working through market scepticism around its valuation. Nike remains a global powerhouse but has been held back by trade tariff concerns. Meanwhile, Huntington Ingalls, a leader in defence and shipbuilding, is quietly benefiting from rising global security spending but its shares have been left behind.
This mix of underappreciated quality names gives this ASX ETF continued upside potential — even after recent gains.
A discount that might not last
It is also worth noting that the MOAT ETF is currently trading at a slight discount to its net asset value (NAV) — around -1.17%, or $1.42 below fair value.
While only small, this discount suggests investors today are paying less than the market value of the underlying companies, offering a margin of safety that's rare after a sharp price move. For long-term investors, this kind of opportunity — strong momentum combined with a valuation buffer — doesn't come around often.
Foolish takeaway
The MOAT ETF's recent 10% surge might look bad on paper for buyers, but dig a little deeper and you'll find a portfolio still full of undervalued, high-quality companies with competitive moats and long-term tailwinds.
In light of this, it may not be too late to buy this popular fund.
