Designed to provide broad exposure to the Financials – Broad segment of the equity market, the Vanguard Financials Index Fund ETF Shares (VFH) is a passively managed exchange traded fund launched on January 26, 2004.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Financials – Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 4, placing it in top 25%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $12.88 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 1.54%.
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 9.05% of total assets, followed by Berkshire Hathaway Inc (BRK/B) and Mastercard Inc (MA).
Performance and Risk
So far this year, VFH has lost about 4.85%, and is up about 11.13% in the last one year (as of 04/27/2026). During this past 52-week period, the fund has traded between $115.61 and $137.67.
The ETF has a beta of 0.96 and standard deviation of 16.85% for the trailing three-year period, making it a medium risk choice in the space. With about 421 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Financials Index Fund ETF Shares holds a Zacks ETF Rank of 1 (Strong 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.