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ETFs: XLF vs. VFH - Which Financial Fund Wins?
3 Jun
Summary
- XLF focuses on 76 large financial institutions.
- VFH offers a broader approach with 404 holdings.
- Both ETFs boast low expense ratios and similar yields.
Investors seeking exposure to the U.S. financial sector have two prominent ETF options: State Street's Financial Select Sector SPDR ETF (XLF) and Vanguard Financials ETF (VFH). Financial stocks are often viewed as economic barometers, reflecting broader economic health.
XLF, launched in 1998, concentrates its investments in 76 of the largest financial institutions within the S&P 500. Its top holdings include significant stakes in Berkshire Hathaway, JPMorgan Chase & Co., and Visa. This concentrated approach means XLF's performance can be heavily influenced by mega-cap banks.
VFH, established in 2004, adopts a more diversified strategy, holding 404 positions. While it also features JPMorgan Chase & Co. and Berkshire Hathaway Inc. among its top holdings, along with Mastercard, its broader scope offers a more comprehensive view of the financial landscape. Both funds share exceptionally low expense ratios (0.08% for XLF, 0.09% for VFH) and a trailing-12-month dividend yield of 1.50%.
