Vanguard Financials ETF

VFH

Market cap $13.4B

Wall Street's biggest banks are heading into second-quarter earnings season with investor expectations running high. Strong trading activity, resilient consumer spending, healthy loan demand, good capital market activity and a pickup in artificial intelligence (AI)-driven capital markets activity have fueled optimism.

Big banks start reporting Q2 earnings next week. Strong results could fuel a fresh rally in financial ETFs like XLF, IYG, IYF and VFH.

Bank ETFs like XLF face a pivotal test as major banks launch Q2 earnings, with loan growth and higher rates shaping the outlook for financial funds.

Vanguard Financials ETF earns a reiterated buy rating due to compelling valuation and strong technical momentum ahead of Q2 earnings season. VFH trades just above 14x earnings with a long-term EPS growth rate near 12%, resulting in an attractive PEG ratio of 1.18x. The ETF benefits from diversified holdings, including banks, Berkshire Hathaway, and Mastercard, with the top 10 stocks comprising 45% of assets.

Looking for broad exposure to the Financials - Broad segment of the equity market? You should consider the Vanguard Financials Index Fund ETF Shares (VFH), a passively managed exchange traded fund launched on January 26, 2004.

Banks announced increased dividends and some announced ​new share buy-back programs on ‌Wednesday, after the Federal Reserve released results of its stress test.

Tech capex and geopolitics have dominated the headlines this year, but opportunities emerge elsewhere. Dividend growth investing could be hitting its stride amid shifting macro and micro trends. Novel, forward-looking strategies may help asset allocators find alpha beyond traditional income approaches.

Fidelity MSCI Financials Index ETF and Vanguard Financials ETF provide nearly identical sector exposure and performance profiles at very low costs. Vanguard Financials ETF holds significantly more assets under management and has a longer track record, having launched in 2004.

The nation's top bank regulators plan to tell Congress on Thursday that their efforts to trim bank rules and ​oversight will bolster economic activity and innovation without injecting undue risk ‌into the financial system.

U.S. banks reported a 3.6% increase in ​their profits in the first ‌quarter of 2026, rising to $80.5 billion as domestic deposits grew again and banks ​set aside slightly more against ​potential losses, the Federal Deposit Insurance ⁠Corporation reported Wednesday.