The key difference between XLF and VFH is their level of diversification. XLF gives you exposure to the largest stocks in the Financials sector while VFH gives you exposure to a portfolio of large, mid and small cap finance stocks. At the point of writing, the XLF has
only 72 holdings while the VFH has 372 holdings.
Another interesting difference is that XLF’s portfolio has about 25% exposure to banks while VFH has about 32% exposure to banks. This might be something to note if you are worried about getting too much exposure to banks due to the
recent banking crisis.
We explore the differences between XLF and VFH, as well as the implications they would have on your investment decisions in this article.
XLF vs VFH
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