5 Funds Full of Moaty Stocks

These rated funds are all about investing in high-quality stocks that can fight off competition

Sunniva Kolostyak 31 August, 2021 | 9:48AM
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Castle with Moat

Investing for the long term is all about ensuring you choose stocks that will remain profitable for years to come. This is what Warren Buffett’s methodology focuses on, as well as many other buy-and-hold investors such as Terry Smith and Nick Train. Such investors say their ideal holding period is "forever", meaning they're on the hunt for businesses that can keep leading their sector for years to come.

At Morningstar we agree, which is why we developed the Economic Moat rating. It indicates how strong a company's competitive advantages are and whether it is likely to keep competitors at bay for an extended period. This can be achieved by having a significant user base, intangible assets such as patents, a cost advantage, high switching costs or efficiencies of scale. And based on how well a company is managing to stay ahead, the wider the moat rating. We use three ratings: none, narrow and wide moats.

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Sunniva Kolostyak  is data journalist for Morningstar.co.uk

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