Fidelity vs. Vanguard Financials: Which Financials ETF Offers More Bang for Your Buck?
Key Points
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.
Fidelity MSCI Financials Index ETF maintains a slight edge in cost with a 0.08% expense ratio and currently offers a marginally higher dividend yield.
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Both the Fidelity MSCI Financials Index ETF (NYSEMKT:FNCL) and Vanguard Financials ETF (NYSEMKT:VFH) target the broad U.S. financial sector. These funds capture banks, insurance providers, and capital markets firms, offering investors a low-cost way to gain diversified exposure to the engines of the American economy through passively managed portfolios.
While the funds provide nearly identical market exposure, the Fidelity fund offers a lower expense ratio while the Vanguard fund features significantly deeper liquidity.
Snapshot (cost & size)
| Metric | FNCL | VFH |
|---|---|---|
| Issuer | Fidelity | Vanguard |
| Expense ratio | 0.08% | 0.09% |
| 1-yr return (as of June 12, 2026) | 7.6% | 7.6% |
| Dividend yield | 1.7% | 1.5% |
| Beta | 0.87 | 0.87 |
| AUM | $2.2 billion | $13.5 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Fidelity fund is slightly more affordable with an expense ratio of 0.08% compared to 0.09% for the Vanguard fund. Additionally, the Fidelity fund currently offers a higher payout, with a dividend yield of 1.7% versus 1.5% for the Vanguard fund.
Performance & risk comparison
| Metric | FNCL | VFH |
|---|---|---|
| Max drawdown (5 yr) | (25.7%) | (25.7%) |
| Growth of $1,000 over 5 years (total return) | $1,563 | $1,564 |
What's inside
Vanguard Financials ETF targets financial services companies with a heavy tilt toward diversified banks and insurance. Its portfolio consists of about 430 holdings, and its largest positions include JPMorgan Chase at 9.15%, Berkshire Hathaway at 8.05%, and Mastercard at 4.5%. This fund was launched in 2004 and has a trailing-12-month dividend of $1.94 per share.
Fidelity MSCI Financials Index ETF holds about 390 stocks with a nearly identical sector breakdown. Its largest positions include JPMorgan Chase at 9.8%, Berkshire Hathaway at 8.07%, and Visa at 6.6%. The Fidelity fund was launched in 2013 and paid $1.23 per share over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What it means for investors
Both the VFH and FNCL ETFs track the MSCI USA IMI Financials Index, which captures large-, mid-, and small-cap financials stocks. The Vanguard fund is much larger in terms of total assets, but the funds’ returns, dividends, and max drawdowns are nearly identical. The larger asset pool provides more liquidity for investors, but the Fidelity fund offers slightly lower fees and a slightly higher dividend yield, which may appeal to investors who are looking to maximize their total income.
Both funds give investors access to a large pool of financial stocks, including all of the industry leaders, and employ diversification strategies to ensure that no single holding becomes too large, regardless of market cap. They’re both solid, affordable ways to play the financials space broadly without having to follow the moves of individual companies. Savvy investors should remember that financials stocks are highly cyclical and sensitive to the health of the overall economy. I’d choose FNCL here simply for its lower fees and higher yield, but both funds could be solid additions to a diversified portfolio.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Sarah Sidlow has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway, JPMorgan Chase, Mastercard, and Visa. The Motley Fool has a disclosure policy.
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