Vanguard Financials ETFVFH

Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough

Suitability
Vanguard Financials ETF VFH is appropriate as a tactical satellite holding for broad exposure to the U.S. financial-services sector. Unlike many other U.S. equity sectors, the financial-services sector still has never come Read more

Bull Case

VFH offers comprehensive coverage of the U.S. financials sector, which mitigates company-specific risk.

Financial-services companies could get a boost from a continued U.S. economic recovery.

Capital ratios are improving. Read more

Bear Case

Greater regulation of financial-services firms is forcing them to make changes to their business models.

Interest-rate spread revenue has remained flat or fallen at most banks, putting pressure on their margins.

High unemployment could constrain consumers' willingness to borrow and their ability to repay their loans, potentially leading to large loan write-downs. Read more