XLF vs VFH Stock Comparison: AI Score, Valuation, Performance and Upside
XLF and VFH both provide financial sector exposure but at different scales. XLF holds S&P 500 mega-cap financials (Berkshire, JPMorgan, Visa) in a highly liquid, low-cost ETF. VFH holds 400+ financial companies including regional banks that provide different interest rate and credit risk characteristics. The 2023 regional bank failures demonstrated VFH's incremental risk vs XLF. For diversified financial exposure, XLF; for total financial market coverage including regional banks, VFH.
XLF vs VFH — Financial Select Sector SPDR (S&P 500 large-cap financials with Berkshire, JPMorgan, Visa, and Mastercard as top holdings at 0.09%) versus Vanguard Financials ETF (total market financials with 400+ holdings including regional banks and smaller financial companies at 0.10%).
XLF holds the edge across 4 of 5 key metrics in this comparison. XLF has delivered stronger 1-year price return (+4.80% vs +4.57% for VFH).
- want large-cap financial exposure with maximum liquidity including Berkshire, JPMorgan, Visa, and Mastercard as core holdings
- prefer the S&P 500 quality filter excluding smaller regional banks that face higher concentration and commercial real estate risk
- use financial sector ETFs for interest rate cycle positioning — mega-banks' interest income benefit from rising rates is clear in XLF's top holdings
- are comfortable with Berkshire's 12% concentration creating insurance/conglomerate exposure within a financial ETF
- want complete US financial market coverage including regional banks, smaller insurers, and specialty finance companies beyond XLF's S&P 500 large-cap scope
- believe regional banks' interest rate sensitivity provides incremental return potential when rate environment is favorable for community bank lending margins
- prefer Vanguard's total market methodology for long-term buy-and-hold financial sector positioning
- are comfortable with 2023-style regional bank stress risk, lower liquidity than XLF, and broader exposure to commercial real estate loan book risk in smaller banks
| Metric | XLF | VFH |
|---|---|---|
| ETF scorei | 55.0 | 56.0 |
| Latest closei | $55.86 | $136.32 |
| 1M returni | -2.82% | -3.08% |
| 6M returni | +14.80% | +15.15% |
| 1Y returni | +4.80% | +4.57% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | XLF | VFH |
|---|---|---|
| 1Y ago | $10.64K (+6.4%) started 2025-09-18 | $10.65K (+6.5%) started 2025-09-18 |
| 5Y ago | $18.16K (+81.6%) started 2021-09-20 | $18.57K (+85.7%) started 2021-09-20 |
| 10Y ago | $42.22K (+322.2%) started 2016-09-19 | $42.67K (+326.7%) started 2016-09-19 |
Hypothetical — past performance does not guarantee future results.
| Metric | XLF | VFH |
|---|---|---|
| Expense ratioi | 0.08% | 0.09% |
| Total assets (AUM)i | $54.59B | $14.77B |
| Dividend yieldi | 1.40% | 1.65% |
| Trailing P/Ei | 15.84 | 15.17 |
| Betai | 0.88 | 0.93 |
| 52-week change | 4.80% | 4.57% |
| Metric | XLF | VFH |
|---|---|---|
| 1Y returni | +4.80% | +4.57% |
| 6M returni | +14.80% | +15.15% |
| 1M returni | -2.82% | -3.08% |
| 1Y Sharpe ratio | 0.09 | 0.07 |
| Betai | 0.88 | 0.93 |
| Dividend yieldi | 1.40% | 1.65% |
| 5Y CAGR | +10.68% | +10.78% |
Over the past year, XLF and VFH have moved strongly in the same direction (correlation of 0.99), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | XLF | VFH |
|---|---|---|---|
| 1Y | Growthi | +4.80% | +4.57% |
| CAGRi | +4.80% | +4.57% | |
| Volatilityi | 14.58% | 14.85% | |
| Sharpe ratioi | 0.09 | 0.07 | |
| Sortino ratioi | 0.12 | 0.10 | |
| Max drawdowni | 14.79% | 14.75% | |
| Current drawdowni | 4.61% | 4.73% | |
| Avg drawdowni | 4.40% | 4.35% | |
| Ulcer Indexi | 5.82% | 5.71% | |
| Max daily dropi | 3.35% | 3.43% | |
| Max wkly dropi | 4.81% | 4.85% | |
| 5Y | Growthi | +65.95% | +66.74% |
| CAGRi | +10.68% | +10.78% | |
| Volatilityi | 18.37% | 19.05% | |
| Sharpe ratioi | 0.40 | 0.40 | |
| Sortino ratioi | 0.57 | 0.56 | |
| Max drawdowni | 25.81% | 25.66% | |
| Current drawdowni | 4.61% | 4.73% | |
| Avg drawdowni | 7.80% | 8.11% | |
| Ulcer Indexi | 10.62% | 10.98% | |
| Max daily dropi | 7.32% | 7.15% | |
| Max wkly dropi | 12.19% | 12.99% | |
| 10Y | Growthi | +246.44% | +238.91% |
| CAGRi | +13.24% | +12.99% | |
| Volatilityi | 22.07% | 22.48% | |
| Sharpe ratioi | 0.47 | 0.46 | |
| Sortino ratioi | 0.67 | 0.64 | |
| Max drawdowni | 42.86% | 44.42% | |
| Current drawdowni | 4.61% | 4.73% | |
| Avg drawdowni | 7.58% | 7.66% | |
| Ulcer Indexi | 10.75% | 11.01% | |
| Max daily dropi | 13.71% | 13.69% | |
| Max wkly dropi | 22.99% | 23.46% |
| Category | XLF | VFH |
|---|---|---|
| Fund name | State Street Financial Select Sector SPDR ETF | Vanguard Financials Index Fund ETF Shares |
| Type | ETF | ETF |
| Expense ratioi | 0.08% | 0.09% |
| Total assets (AUM)i | $54.59B | $14.77B |
| Dividend yieldi | 1.40% | 1.65% |
- Large-cap financial quality filter: XLF's S&P 500 universe ensures only the largest, most systemically important financial institutions and proven financial businesses
- Berkshire Hathaway as diversified financial anchor: BRK.B's ~12% weight provides insurance + operating business + equity portfolio diversification within XLF's financial sector allocation
- Visa and Mastercard payment network premium: XLF includes Visa and Mastercard — high-margin, asset-light payment networks that provide growth without traditional bank credit risk
- 400+ holdings vs XLF's 70: VFH's breadth includes regional banks, smaller insurers, and specialty finance companies not in XLF's S&P 500 scope
- Regional bank rate sensitivity: smaller regional banks in VFH may benefit more directly from interest rate improvements in lending spreads than large universal banks
- Complete financial sector representation: VFH aims to capture the full investable US financial market vs XLF's large-cap selection
- Bank earnings interest rate sensitivity: XLF's large bank holdings (JPMorgan, BofA, Wells Fargo) earn more when rates are high (net interest margin) but face loan demand reduction in rate cycles
- Berkshire concentration creates non-bank characteristics: 12% Berkshire means XLF isn't a pure bank/financial ETF — investors wanting pure bank exposure may prefer KBE or KBWB
- Credit risk in economic downturns: bank loan portfolios face elevated charge-offs in recessions — financial sector ETFs underperform significantly in credit cycles (2008-2009, 2020)
- Regional bank concentration risk: smaller regional banks in VFH are more exposed to commercial real estate (CRE) loan stress and deposit instability than the mega-banks in XLF
- 2023 regional bank crisis impact: the SVB/Signature Bank/First Republic failures in March 2023 impacted regional banks disproportionately — VFH's regional bank exposure created more volatility than XLF during this period
- Lower liquidity than XLF: VFH's lower trading volume creates wider bid-ask spreads for tactical positions
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