The Vanguard Financials ETF (VFH) was launched on January 26, 2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $12.63 billion, making it one of the largest ETFs attempting to match the performance of the Financials - Broad segment of the equity market. VFH seeks to match the performance of the MSCI US Investable Market Financials 25/50 Index before fees and expenses.
The MSCI US Investable Market Index (IMI)/Financials 25/50 measures the investment return of stocks in the financial sector.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.71%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector -- about 100% of the portfolio.
Looking at individual holdings, Jpmorgan Chase & Co (JPM) accounts for about 9.6% of total assets, followed by Berkshire Hathaway Inc (BRK/B) and Mastercard Inc (MA).
Performance and Risk
Year-to-date, the Vanguard Financials ETF return is roughly 9.53% so far, and is up roughly 23.7% over the last 12 months (as of 08/18/2025). VFH has traded between $104.87 and $130.3 in this past 52-week period.
The ETF has a beta of 1.01 and standard deviation of 18.85% for the trailing three-year period, making it a medium risk choice in the space. With about 418 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Financials ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VFH is an outstanding option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
iShares MSCI Europe Financials ETF (EUFN) tracks MSCI Europe Financials Index and the Financial Select Sector SPDR ETF (XLF) tracks Financial Select Sector Index. iShares MSCI Europe Financials ETF has $4.44 billion in assets, Financial Select Sector SPDR ETF has $52.72 billion. EUFN has an expense ratio of 0.48%, and XLF charges 0.08%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Vanguard Financials ETF (VFH): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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