Vanguard's VFH or First Trust's FTXO: Which Financial Sector ETF Belongs in Your Portfolio?
Broad diversification and lower costs favor Vanguard, but First Trust's concentrated banking bet delivered 24% returns over the past year.
Overview
Investors choosing between Vanguard Financials ETF (NYSEMKT:VFH) and First Trust Nasdaq Bank ETF (NASDAQ:FTXO) are weighing a broad-market financial services portfolio against a concentrated, factor-weighted bet on the banking industry.
While both funds target the financial sector, they differ significantly in their scope and risk profiles. The Vanguard fund offers a massive, multi-industry basket, whereas the First Trust fund uses a liquidity- and volatility-weighted index to select a smaller group of U.S. banks.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. 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.