Average Daily Volume
629.8K
Fund Overview
The Vanguard Financials ETF (VFH) is an exchange-traded fund that seeks to track the performance of the MSCI US Investable Market Index (IMI)/Financials 25/50. This ETF provides broad exposure to U.S. financial services companies, including banks, insurance firms, investment services, and real estate investment trusts (REITs). VFH is designed for investors looking to gain diversified access to the financial sector, which is a key component of the U.S. economy. The fund is known for its low expense ratio and strong track record of closely mirroring its benchmark index.
- Asset Class
-
Equity
- Industry
-
Broad Financials
- Annual Dividend Rate
-
- Smart Beta
-
No
- Leveraged / Inverse
-
N/A / No
- Dividend Quality - Yield
-
- 1.48 %
- Currency Hedged
-
No
- Portfolio Turnover
-
5 %
- Dividend Date
-
Why Invest in the VFH ETF?
Potential Benefits
- Diversified exposure to the U.S. financial sector, including banks, insurance companies, and REITs.
- Low expense ratio compared to many peers, making it cost-effective for long-term investors.
- Strong historical performance in tracking its benchmark index.
- Liquidity and ease of trading due to its large asset base.
- Potential for growth tied to economic cycles and interest rate movements.
Potential Risks
- Sensitive to interest rate changes, which can impact financial sector profitability.
- Exposure to regulatory risks, as financial firms operate in a heavily regulated environment.
- Vulnerability to economic downturns, which can lead to higher loan defaults and reduced financial activity.
- Concentration risk within the financial sector, lacking diversification across other industries.
RSI data unavailable or insufficient history.
Monthly Returns (%)
| Year |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
| 2026 |
-1.9%
|
-4.1%
|
-3.5%
|
+6.1%
|
-1.2%
|
+4.6%
|
+5.8%
|
+1.2%
|
-7.4%
|
+0.3%
|
-
|
-
|
| 2025 |
+6.6%
|
+0.2%
|
-4.9%
|
-2.3%
|
+5.3%
|
+4.0%
|
+0.4%
|
+3.3%
|
-0.2%
|
-2.8%
|
+1.9%
|
+3.2%
|
| 2024 |
+1.9%
|
+4.2%
|
+5.0%
|
-4.6%
|
+3.4%
|
-0.7%
|
+7.0%
|
+3.7%
|
-0.3%
|
+3.0%
|
+11.5%
|
-5.9%
|
| 2023 |
+7.8%
|
-2.1%
|
-10.3%
|
+2.2%
|
-3.9%
|
+6.9%
|
+6.0%
|
-3.1%
|
-3.2%
|
-2.9%
|
+11.4%
|
+6.8%
|
| 2022 |
-0.6%
|
-1.3%
|
-1.0%
|
-10.1%
|
+3.5%
|
-10.7%
|
+7.4%
|
-1.9%
|
-7.9%
|
+12.1%
|
+6.1%
|
-5.9%
|
| 2021 |
-1.5%
|
+11.8%
|
+5.9%
|
+6.3%
|
+4.1%
|
-2.9%
|
-0.3%
|
+5.1%
|
-1.7%
|
+7.6%
|
-5.3%
|
+2.9%
|
| 2020 |
-2.4%
|
-11.2%
|
-22.8%
|
+10.0%
|
+2.9%
|
+0.3%
|
+3.0%
|
+3.9%
|
-3.8%
|
+0.8%
|
+16.4%
|
+6.9%
|
| 2019 |
+9.4%
|
+3.1%
|
-3.1%
|
+8.6%
|
-7.0%
|
+6.5%
|
+2.7%
|
-5.2%
|
+4.8%
|
+2.0%
|
+4.9%
|
+2.4%
|
| 2018 |
+5.7%
|
-2.7%
|
-3.2%
|
-0.4%
|
-0.2%
|
-1.9%
|
+4.7%
|
+1.4%
|
-2.6%
|
-5.3%
|
+2.7%
|
-11.4%
|
| 2017 |
+0.2%
|
+4.8%
|
-2.7%
|
-0.7%
|
-1.6%
|
+6.3%
|
+1.6%
|
-2.0%
|
+5.5%
|
+2.5%
|
+3.5%
|
+1.5%
|
< -5%
-5% to -2%
-2% to 0%
0%
0% to +2%
+2% to +5%
> +5%
Top Holdings (by weight)
| Symbol |
Company Name |
Weight |
|
JPM
|
JPMORGAN CHASE & CO |
9.0 % |
|
BRK-B
|
BERKSHIRE HATHAWAY INC CLASS B |
8.2 % |
|
MA
|
MASTERCARD INC CLASS A |
5.7 % |
|
V
|
VISA INC CLASS A |
4.7 % |
|
BAC
|
BANK OF AMERICA CORP |
3.8 % |
|
WFC
|
WELLS FARGO & CO |
3.1 % |
|
GS
|
THE GOLDMAN SACHS GROUP INC |
2.4 % |
|
SPGI
|
S&P GLOBAL INC |
2.0 % |
|
AXP
|
AMERICAN EXPRESS CO |
2.0 % |
|
PGR
|
PROGRESSIVE CORP |
2.0 % |
Top 10 holdings shown, out of 407 total holdings.
Related ETFs: VFH vs Peers
Comparison highlights key differences on cost, coverage, and focus within sector ETFs.
Investment Strategy
VFH tracks the MSCI US Investable Market Index (IMI)/Financials 25/50, which includes large, mid, and small-cap U.S. financial stocks. The index is market-cap weighted, meaning larger companies have a greater influence on the fund's performance. VFH primarily holds common stocks of financial sector companies, with periodic rebalancing to align with the index. The fund is passively managed, aiming to replicate the index's performance rather than outperform it.
Frequently Asked Questions
What types of companies does VFH invest in?
VFH invests in a wide range of U.S. financial companies, including banks, insurance firms, investment services, and REITs.
How does VFH differ from XLF?
VFH includes small and mid-cap financial stocks, while XLF focuses primarily on large-cap companies. VFH also has a lower expense ratio.
Is VFH a good investment during rising interest rates?
Financial stocks, including those in VFH, often benefit from rising interest rates, as they can improve profitability for banks and lenders.
What is the expense ratio of VFH?
VFH has a low expense ratio of 0.10%, making it one of the more cost-effective financial sector ETFs.
Industry Overview
The financial sector is a cornerstone of the U.S. economy, encompassing banks, insurance companies, investment firms, and REITs. The Vanguard Financials ETF (VFH) provides investors with broad exposure to this sector, which tends to perform well during periods of economic growth and rising interest rates. However, financial stocks can also be volatile, influenced by regulatory changes, credit risks, and macroeconomic conditions. Investing in VFH allows for diversified participation in the financial industry without the need to pick individual stocks.
Alternative Comparison
Compared to the Financial Select Sector SPDR Fund (XLF), VFH offers a broader exposure by including small and mid-cap financial stocks, whereas XLF focuses primarily on large-cap companies. VFH also has a lower expense ratio than many peers, such as the iShares U.S. Financials ETF (IYF). Unlike leveraged or inverse financial ETFs (e.g., FAZ or UYG), VFH provides straightforward, long-term exposure to the sector without the complexities of derivatives.
Issuer Overview
Vanguard is one of the world's largest investment management companies, known for its low-cost index funds and ETFs. The firm is renowned for its investor-first philosophy, offering a wide range of products designed to provide broad market exposure at minimal cost. VFH is part of Vanguard's sector-specific ETF lineup, which aims to deliver precise market segments to investors.
Conclusion
The Vanguard Financials ETF (VFH) is a cost-effective and diversified way to invest in the U.S. financial sector. Its low expense ratio, broad market coverage, and strong index-tracking record make it a compelling choice for investors seeking financial sector exposure. However, potential investors should be mindful of the sector's sensitivity to economic cycles and interest rate changes.
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