The financial sector could be one of the best-performing areas of the stock market in 2025 and for several years after. While there's no guarantee that any sector, industry, or individual stock will perform well, there are a few big catalysts that could cause the financial sector to deliver better-than-expected profitability, growth, and of course, investor returns.
Bank stocks made up one of the best-performing areas of the stock market in 2024. The financial sector, which mainly consists of banks, rose by more than 30%.
We're only seven days away from the inauguration of Donald Trump as the 47th U.S. president. Investors have been speculating about which stocks might perform the best in a second Trump administration since the November election, and even before then.
Vanguard Financials Index Fund ETF Shares outperformed major indices in 2024, and I maintain a buy rating due to strong sector fundamentals and economic growth prospects. The financials sector is poised for further gains in 2025, driven by rate cuts, economic growth, and declining credit risk. VFH offers diversified exposure across financial industries, including large, mid, and small caps, with top holdings like Berkshire Hathaway and JPMorgan.
The Financials sector is a top performer in 2024, driven by optimism for increased M&A activity, favorable regulations, and solid valuations. I maintain a hold rating on VFH due to decent valuation and generally bullish technicals, despite weak seasonality and expected Q1 volatility. VFH has grown significantly, with assets under management rising to $13 billion and a low expense ratio of 10 basis points.
Launched on 01/26/2004, the Vanguard Financials ETF (VFH) is a passively managed exchange traded fund designed to provide a broad exposure to the Financials - Broad segment of the equity market.
Mutual fund giant Vanguard Group offers over 60 equity-focused exchange-traded funds (ETFs). There are ETFs for growth stocks, value stocks, and dividend stocks.
Vanguard is known for its low-cost ETFs, especially its extremely popular Vanguard S&P 500 ETF. However, there are dozens of great ETFs in Vanguard's portfolio, and some of them could be very big winners over the next few years.
2024 isn't quite in the books, but it's already been a banner year for stocks.
After Donald Trump's decisive win in the 2024 U.S. presidential election, Wall Street reacted strongly, particularly in the financial sector. The Financial Select Sector SPDR Fund XLF rose 4.84%, while the Vanguard Financials Index Fund ETF VFH gained 5.33% in early Wednesday trading.
Vanguard Financials Index Fund ETF invests in U.S. Financials sector stocks, with a low expense ratio of 0.10% and $10.1 billion in net assets. VFH's top holdings include JPMorgan Chase, Berkshire Hathaway, Mastercard, and Visa, with a diversified portfolio of 402 holdings, representing over 40% of the fund. Financials are procyclical; despite recession risks, current valuations suggest VFH is undervalued, with a potential IRR of over 16% per year for the next five years.
The Vanguard Financials ETF (VFH) was launched on 01/26/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Financials - Broad segment of the equity market.