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 (+11.39% vs +11.25% 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 | 27.2 | 27.2 |
| Latest closei | $57.19 | $138.89 |
| 1M returni | +6.92% | +6.41% |
| 3M returni | -0.84% | -1.70% |
| 6M returni | +11.64% | +10.45% |
| 1Y returni | +11.39% | +11.25% |
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 | $11.31K (+13.1%) started 2025-11-03 | $11.33K (+13.3%) started 2025-11-03 |
| 5Y ago | $17.03K (+70.3%) started 2021-11-04 | $17.11K (+71.1%) started 2021-11-04 |
| 10Y ago | $43.15K (+331.5%) started 2016-11-04 | $43.26K (+332.6%) started 2016-11-04 |
Hypothetical — past performance does not guarantee future results.
| Metric | XLF | VFH |
|---|---|---|
| Expense ratioi | 0.08% | 0.09% |
| Total assets (AUM)i | $50.97B | $13.85B |
| Dividend yieldi | 1.55% | 1.81% |
| Trailing P/Ei | 16.30 | 15.69 |
| Betai | 0.87 | 0.92 |
| 52-week change | 11.39% | 11.25% |
| Metric | XLF | VFH |
|---|---|---|
| 1Y returni | +11.39% | +11.25% |
| 6M returni | +11.64% | +10.45% |
| 3M returni | -0.84% | -1.70% |
| 1M returni | +6.92% | +6.41% |
| 1Y Sharpe ratio | 0.51 | 0.49 |
| Betai | 0.87 | 0.92 |
| Dividend yieldi | 1.55% | 1.81% |
| 5Y CAGR | +9.28% | +9.03% |
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 | +11.39% | +11.25% |
| CAGRi | +11.40% | +11.26% | |
| Volatilityi | 14.57% | 14.74% | |
| Sharpe ratioi | 0.51 | 0.49 | |
| Sortino ratioi | 0.72 | 0.70 | |
| Max drawdowni | 14.79% | 14.75% | |
| Current drawdowni | 1.99% | 2.61% | |
| Avg drawdowni | 4.74% | 4.67% | |
| Ulcer Indexi | 6.09% | 5.99% | |
| Max daily dropi | 3.35% | 3.43% | |
| Max wkly dropi | 4.81% | 4.85% | |
| 5Y | Growthi | +55.80% | +54.04% |
| CAGRi | +9.28% | +9.03% | |
| Volatilityi | 18.30% | 19.00% | |
| Sharpe ratioi | 0.33 | 0.32 | |
| Sortino ratioi | 0.47 | 0.44 | |
| Max drawdowni | 25.81% | 25.66% | |
| Current drawdowni | 1.99% | 2.61% | |
| Avg drawdowni | 7.90% | 8.23% | |
| Ulcer Indexi | 10.65% | 11.02% | |
| Max daily dropi | 7.32% | 7.15% | |
| Max wkly dropi | 12.19% | 12.99% | |
| 10Y | Growthi | +252.66% | +244.62% |
| CAGRi | +13.44% | +13.18% | |
| Volatilityi | 22.10% | 22.51% | |
| Sharpe ratioi | 0.48 | 0.46 | |
| Sortino ratioi | 0.68 | 0.65 | |
| Max drawdowni | 42.86% | 44.42% | |
| Current drawdowni | 1.99% | 2.61% | |
| Avg drawdowni | 7.65% | 7.73% | |
| Ulcer Indexi | 10.77% | 11.04% | |
| 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 | $50.97B | $13.85B |
| Dividend yieldi | 1.55% | 1.81% |
- 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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