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Vanguard Financials ETF (VFH) has generated a total return of 52% since 2021, significantly outpacing the First Trust Nasdaq Bank ETF (FTXO), which delivered a total return of 29% over the same period.
This performance gap highlights a key decision point for investors: whether to prioritize broad financial sector exposure or a concentrated bet on U.S.
The difference in strategy is fundamental to their respective results. VFH follows a traditional cap-weighted approach, holding 404 securities across banks, insurance companies, and investment firms.
In contrast, FTXO employs a smart-beta methodology focused on liquidity and value factors, holding only 50 stocks exclusively from the banking sub-sector.
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