For investors seeking momentum, Vanguard Financials ETF (VFH Quick QuoteVFH - Free Report) is probably on radar now. The fund just hit a 52-week high and is up more than 64% from its 52-week low price of $57.41/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

VFH in Focus

This ETF provides exposure to stocks in the financial sector. It has key holdings in diversified banks, regional banks, and asset management & custody banks. VFH charges 10 basis points in annual fees (see: all the Financials ETFs here).

Why the Move?

The financial segment of the broad U.S. stock market has been an area to watch given the rise in yields. The 10-year Treasury yield climbed to its highest levels since June to top 1.57%. Federal Reserve Chairman Jerome Powell warned that higher inflation may last longer than anticipated. He said, “As the economy continues to reopen and spending rebounds, we are seeing upward pressure on prices, particularly due to supply bottlenecks in some sectors.” Last week, the central bank projected that they are ready to raise rates in 2022 and that the bank is likely to begin reducing its monthly bond purchases as soon as November. The financial sector is the biggest beneficiary of rising interest rates. This is because the steepening yield curve would bolster profits for banks, insurance companies and discount brokerage firms.

More Gains Ahead?

Currently, VFH has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook, suggesting that the outperformance could continue in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there is definitely still some promise for those who want to ride on this surging ETF a little longer.