A Tale of Two Financial ETFs: How Vanguard Financials ETF (VFH) and First Trust Nasdaq Bank ETF (FTXO) Compare
VFH offers broader diversification at 0.09% expense ratio, while FTXO concentrates on banks with higher volatility but stronger 1-year returns.
Overview
Vanguard Financials ETF (NYSEMKT:VFH) provides broad, low-cost exposure to the entire financial sector, while First Trust Nasdaq Bank ETF (NASDAQ:FTXO) offers a more concentrated, more expensive play on U.S. banks.
Selecting between these two depends on whether an investor seeks broad industry representation or a targeted bet on the banking sub-sector. The Vanguard fund follows a traditional cap-weighted approach, while the First Trust fund utilizes a smart-beta methodology focused on liquidity and value factors.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Source
Originally published at www.fool.com.