Why I’m Buying This Top US Financials ETF

The world’s top financial institutions have reason for optimism in the summer of 2021. Countries across the developed world are moving full steam ahead with their reopening plans. This is especially true in the United States. In this environment, investors should look to stash top financial stocks that are set to rake in profits in the months ahead.

Vanguard Financials ETF (NYSE:VFH) is one of the best exchange-traded funds (ETF) available for investors who want exposure to top financial stocks. This ETF seeks to track the performance of a benchmark index that measures the investment return of stocks in the financials sector. It is passively managed, using a full-replication strategy when possible.

Shares of this ETF have climbed 25% in 2021 as of close on June 29. The ETF is up 57% from the prior year. Some of the top holdings in this ETF include JPMorgan Chase, Berkshire Hathaway, Bank of America, and BlackRock.

Policy in the U.S. also favours this sector right now. The Federal Reserve has shown little inclination to raise interest rates, especially as the economy recovers from the brutal COVID-19 pandemic. Asset purchasing programs from the central bank were cranked up during the crisis. These factors have generated a very friendly environment for top financial firms. Investors should look to get in on the ongoing frenzy.

This ETF has more than doubled since plunging below the $45 mark during the March 2020 market pullback. The financial space still has room to run in the second half of 2021.