🤝 BFF Take
QUAL Wins on Cost — MOAT Wins on Concentration and Value Discipline
QUAL (iShares MSCI USA Quality Factor ETF) and MOAT (VanEck Morningstar Wide Moat ETF) both aim to deliver market-beating returns through systematic stock selection, but using very different methodologies. QUAL selects ~125 US large-cap stocks scoring high on return on equity, earnings stability, and low debt ratios — essentially financially healthy companies. MOAT selects 40-50 stocks that Morningstar analysts rate as having "wide moats" (durable competitive advantages) AND trading at a discount to fair value — combining quality with a value discipline. QUAL costs 0.15%; MOAT costs 0.47%. QUAL has outperformed significantly recently due to its tech mega-cap exposure. MOAT's value overlay has sometimes caused it to underweight the most expensive tech names. For investors who want quality exposure at lower cost, QUAL is better. For investors who want Morningstar's conviction picks with a value margin of safety, MOAT is distinctive.
📋 Quick Takeaways
📊QUAL selects 125 stocks on ROE, earnings stability, and low debt — systematic quality screen across large caps
🏰MOAT selects 40-50 stocks with durable competitive advantages AND value margin of safety — Morningstar's conviction picks
💰QUAL costs 0.15% vs MOAT's 0.47% — QUAL is 3x cheaper; both beat simple passive indexing historically
📊 Data-Based Take: QUAL has the lower fee
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
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Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice
QUAL
iShares MSCI USA Quality Factor ETF
MOAT
VanEck Morningstar Wide Moat ETF
📋 QUAL vs MOAT — Key Facts Side by Side
| Metric |
QUAL |
MOAT |
| Fund Name |
iShares MSCI USA Quality Factor ETF |
VanEck Morningstar Wide Moat ETF |
| Issuer |
iShares |
VanEck |
| Tracks Index |
MSCI USA Sector Neutral Quality |
Morningstar Wide Moat Focus |
| Expense Ratio |
0.15% ✓ |
0.47% |
| Cost per $10K/yr |
$15.00 |
$47.00 |
| AUM |
$36B |
$12B |
| Holdings |
125 |
50 |
| Inception |
2013 |
2012 |
| 1-Year Return |
+22.60% |
+18.40% |
| 3-Year Return |
+13.40% |
+10.20% |
| 5-Year Return |
+18.20% |
+15.60% |
| Avg Bid-Ask Spread |
0.01% |
0.02% |
Data from ETF BFF database. Returns are annualised. Not investment advice.
📊 QUAL vs MOAT — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Should You Buy QUAL or MOAT?
Choose if...
QUAL
- You want the lowest fees — saves ~$32/yr per $10K vs MOAT
- You want broader diversification (125 holdings vs 50)
Choose if...
MOAT
- You already use VanEck and prefer staying within their fund family
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❓ QUAL vs MOAT — Frequently Asked Questions
What is the difference between quality and wide moat as investment approaches?
Quality investing selects companies with strong financial metrics — high return on equity, consistent earnings, low leverage. It's a systematic quantitative screen. Wide moat investing (MOAT's approach) focuses on competitive advantage — does the company have durable pricing power, cost advantages, network effects, or switching costs that protect profits? MOAT adds a value overlay — it only buys wide-moat companies at a discount to Morningstar's fair value estimate. QUAL is purer quality factor; MOAT blends quality with value.
Has QUAL or MOAT historically beaten the S&P 500?
Both have delivered competitive returns vs the S&P 500 over most periods, though not consistently in all environments. QUAL has outperformed in recent years due to heavy tech weighting (Apple, Microsoft, Nvidia all score high on quality metrics). MOAT's value overlay has caused it to sometimes underweight expensive tech in favor of more attractively valued wide-moat companies. Both demonstrate that disciplined stock selection can add value — the question is whether you want to pay for it.
What stocks does MOAT hold?
MOAT's holdings rotate based on Morningstar analyst valuations — it buys wide-moat stocks when they are undervalued and sells them when they reach fair value. Historical holdings have included Amazon, Alphabet, Microsoft, UnitedHealth, Salesforce, and various financial/industrial companies with durable moats. The portfolio typically includes 40-50 names across sectors and is more value-tilted than QUAL.
Is DIVO or COWZ better than MOAT for value-quality?
DIVO and COWZ focus more on dividend income and free cash flow yield respectively — different value metrics than MOAT's competitive advantage framework. COWZ (free cash flow yield) and MOAT (competitive advantage + margin of safety) have different selection criteria but often overlap on high-quality businesses. See our COWZ vs VTV comparison for more context on free cash flow approaches.
Are factor ETFs worth the higher fees?
Quality factor ETFs (like QUAL at 0.15%) have shown persistent positive alpha in academic research. The "quality premium" has held across markets and time periods. Whether MOAT at 0.47% earns enough alpha to justify its fee premium over QUAL is debatable — both have beaten the S&P 500 in recent periods, but historical outperformance is never guaranteed to persist. The cost-conscious investor might prefer QUAL; the Morningstar-conviction investor might prefer MOAT's specific stock selection methodology.
New to ETF investing? See answers to the most common ETF questions →
📄 QUAL & MOAT Fact Sheets
ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.