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Should You Invest in the Vanguard Financials ETF (VFH)?
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Launched on 01/26/2004, the Vanguard Financials ETF (VFH - Free Report) is a passively managed exchange traded fund designed to provide a 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.
Additionally, sector ETFs offer convenient ways 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 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $9.39 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 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.87%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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, Berkshire Hathaway Inc (BRK/B) accounts for about 8.16% of total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Visa Inc (V - Free Report) .
Performance and Risk
So far this year, VFH return is roughly 9.84%, and was up about 32.01% in the last one year (as of 04/03/2024). During this past 52-week period, the fund has traded between $74.65 and $102.39.
The ETF has a beta of 1.10 and standard deviation of 19.91% for the trailing three-year period, making it a medium risk choice in the space. With about 397 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 excellent 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 U.S. Financials ETF (IYF - Free Report) tracks Dow Jones U.S. Financials Index and the Financial Select Sector SPDR ETF (XLF - Free Report) tracks Financial Select Sector Index. IShares U.S. Financials ETF has $2.59 billion in assets, Financial Select Sector SPDR ETF has $38.02 billion. IYF has an expense ratio of 0.40% and XLF charges 0.09%.
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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Should You Invest in the Vanguard Financials ETF (VFH)?
Launched on 01/26/2004, the Vanguard Financials ETF (VFH - Free Report) is a passively managed exchange traded fund designed to provide a 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.
Additionally, sector ETFs offer convenient ways 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 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $9.39 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 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.87%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many 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, Berkshire Hathaway Inc (BRK/B) accounts for about 8.16% of total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Visa Inc (V - Free Report) .
Performance and Risk
So far this year, VFH return is roughly 9.84%, and was up about 32.01% in the last one year (as of 04/03/2024). During this past 52-week period, the fund has traded between $74.65 and $102.39.
The ETF has a beta of 1.10 and standard deviation of 19.91% for the trailing three-year period, making it a medium risk choice in the space. With about 397 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 excellent 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 U.S. Financials ETF (IYF - Free Report) tracks Dow Jones U.S. Financials Index and the Financial Select Sector SPDR ETF (XLF - Free Report) tracks Financial Select Sector Index. IShares U.S. Financials ETF has $2.59 billion in assets, Financial Select Sector SPDR ETF has $38.02 billion. IYF has an expense ratio of 0.40% and XLF charges 0.09%.
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.