Warren Buffett is perhaps the most quotable person in the history of investing. He casually tosses off various thoughts, and legions of followers quickly relay those thoughts as the gospel truth. One of his most popular phrases: “In business, I look for economic castles protected by unbreachable moats.”

Indeed the notion of a “wide moat” around a business has become so popular that exchange-traded fund sponsors have built portfolios around the theme.

But what is a wide moat? Put simply, it is the barrier that helps a dominant company in an industry maintain its dominance. Such companies sit on five pillars of strength: a network effect whereby customers favor a product because their peers do as well (think of a company like eBay); a customer’s disincentive to switch to a competing product; high barriers to entry into the company’s market from new rivals; the company’s strong brands, patents and licenses; and scale economies that enable the company to produce at lower costs and thus compete on price.

Those companies with wide moats include Google (GOOG), Harley-Davidson (HOG) and the Hershey Company (HSY).

You’ll find all three of those in the Market Vectors Morningstar Wide Moat ETF (MOAT), launched by Van Eck Global in April 2012. Index managers at Morningstar select the 20 least-expensive stocks among the 1,200 thought to possess reasonably strong moats.

The fund, which rebalances quarterly with adjustments in the underlying index, has already proved to be quite popular with investors, and it now has roughly $850 million in assets under management.

Van Eck and Morningstar have decided to parlay that success into a just-launched fund with an international twist: The Market Vectors Morningstar International Moat ETF (MOTI) began trading on July 14, and time will tell if the foreign-focused doppelganger fund will hold similar appeal.

While the new international fund adheres to the same basic principles of wide moat investing, Morningstar’s index managers made a few slight tweaks. The new fund will have 50 constituents, and its geographic concentration isn’t tied to global market weightings. For example, four English-speaking countries (Australia, Canada, India and the United Kingdom) account for roughly 58 percent of the portfolio.

“The weighting will be heavily influenced by relative valuations at that time,” says Damien Conover, director of equity research at Morningstar. As a result, as valuations change across various foreign markets, future index rebalancings should lead to greater exposure for other countries in the portfolio. Nevertheless, certain regions may have more moat-rated companies than others, says Brandon Rakszawski, product manager at Van Eck Global.

Financial services stocks currently make up almost half of the portfolio (they cover only 20 percent of the domestic fund). The typical holding in the fund carries a $36 billion market value, so these are clearly large companies in their local economies. “Generally speaking, companies with longer track records have had more time to establish moats around their business,” says Conover.

The move to develop an international version of the domestic fund is a logical move. “People may not realize that the United States makes up only half of Morningstar’s research universe,” says Rakszawski. He adds that “we’ve had a lot of long-term success with Morningstar’s research.”

The newly launched international fund carries a 0.56 percent expense ratio, slightly higher than the 0.49 percent fee charged for the domestic fund.

What should you expect in terms of performance? Because of the funds’ geographic and industry concentrations, it’s difficult to make apples-to-apples comparisons. Still, it’s fair to look at long-term back-tested performance data.

Looking at the domestic fund, Conover points out that the underlying Morningstar wide moat index, which has been tracked since 2002, has sharply outperformed its index benchmark. While the wide moat index has returned 14.5 percent annually since 2002, the S&P 500 has returned just 9.4 percent annually.

In a similar vein, an international moat index has been tracked by Morningstar since 2004, delivering an 11.6 percent annualized return since then, while the Morningstar Global Markets ex-U.S. index has had a 5.9 percent annual gain in that time.

Still, it’s hard to spot outperformance for the domestic fund since it started trading in 2012. The domestic MOAT fund has delivered a 17.3 percent annualized gain over the past three years, according to Morningstar. That lags the S&P 500 benchmark by a full percentage point.

How to explain the difference between the three-year and long-term results? Perhaps we can conclude that a portfolio of wide moat stocks can generally keep pace in a bull market environment and really shows its mettle in weak market conditions.

Whether that logic applies to the newly launched international moat fund remains to be seen. But it is clear that both of these funds have established impressive long-term gains. That’s a key consideration, since these are really buy-and-hold ETFs rather than trading vehicles. After all, once a company establishes a wide moat, it tends to maintain it well into the future.