ETF Research Center

Vanguard Financials ETF seeks to track the performance of the MSCI US Investable Market Financials Index.

FUND BASICS
Category	US Equities
Fund Sponsor	Vanguard Group Inc/The
Website	www.vanguard.com
Inception date	Jan 30, 2004
Assets (mns)	$7,980
Currency	USD
Expense ratio	10 bp
Distributions	Quarterly

FUND STRUCTURE
Regulation	Open-Ended Fund
Custodian	Brown Brothers Harriman & Co
Weighting	Market Cap
Index replication	Full
Uses derivatives	No
Options available	Yes

SECTOR BREAKDOWN

CONSTITUENT BREAKDOWN
No. of constituents	428
Wgt avg mkt cap (mns)	$167,079
Large cap (>$10bn)	83.5%
Mid cap ($2-10bn)	12.0%
Small cap (<$2bn)	4.6%
Developed mkts	100.0%
Emerging mkts	0.0%

TOP TEN HOLDINGS
Total	43.0 %
JPMORGAN CHASE & CO	10.3 %
BANK OF AMERICA CORP	7.2 %
BERKSHIRE HATHAWAY INC-CL B	7.1 %
WELLS FARGO & CO	4.8 %
CITIGROUP INC	4.3 %
AMERICAN EXPRESS CO	2.2 %
US BANCORP	1.9 %
GOLDMAN SACHS GROUP INC	1.9 %
CME GROUP INC	1.7 %
S&P GLOBAL, INC.	1.7 %

TOP COUNTRY EXPOSURE
	UNITED STATES	94.9 %
	BRITAIN	1.9 %
	SWITZERLAND	1.6 %
	BERMUDA	1.6 %
	PUERTO RICO	0.2 %
	CAYMAN ISLANDS	0.1 %

HISTORICAL PERFORMANCE info

	Custom date range	Compare to
	thru

Standardized Annual Returns (thru December 31)
Year-to-date	1 year	5 years	10 years	Since Incep.
31.6%	31.6%	11.1%	12.3%	4.9%

Market Correlations
versus...	Beta	R-squared
S&P500	1.12	75%
MSCI EAFE	1.00	50%
MSCI Emg. Mkts.	0.68	39%

Technical Indicators
Recent close	$76.42
30d moving avg.	$76.12
Annualized volatility	15.6%
Short interest (ETF)	2.4%
Short interest (Underlying)	2.2%
Relative strength (RSI)	63

Liquidity measures
Avg. volume (thou.)	341
Turnover	0.3%
Bid/Ask (% of price)	0.02%
ADV underlying (mns)	$15,531

Distributions

FINDING ALTERNATIVE FUNDS

Below is a list of 20 potential alternatives to the Vanguard Financials ETF based on the alternatives' overlap in portfolio holdings with VFH. Consider funds with lower expense ratios and/or higher ALTAR Score™ ratings as possible alternatives.

Benchmark ticker:

VFH

Expense:

10 bp

ALTAR Score™:

7.1%

ALTERNATIVE ETFs BASED ON OVERLAP WITH VFH
Ticker	Fund Name	Overlap¹ vs VFH (%)	Expense ratio (bp)	Savings vs VFH (bp)	ALTAR Score™ (%)	ALTAR vs VFH (%)
FNCL	Fidelity MSCI Financials	98.6	8	2	7.1	+0.0
XLF	Financials Select Sector SPDR	79.0	13	-3	6.7	-0.4
IEFN	iShares Evolved U.S. Financials	71.5	18	-8	7.2	+0.1
IYF	iShares DJ US Financials	67.6	42	-32	5.8	-1.3
RWW	Invesco S&P Financials Revenue	67.0	45	-35	7.0	-0.1
IYG	iShares DJ US Financial Services	65.8	42	-32	6.1	-1.0
JHMF	John Hancock Multifactor Financials	65.3	40	-30	6.3	-0.8
RYF	Invesco S&P Equal Weight Financials	50.9	40	-30	7.0	-0.1
IXG	iShares S&P Global Financial Sector	48.8	46	-36	8.1	+1.0
FXO	First Trust Financial Alphadex	37.0	63	-53	7.6	+0.5
KBWB	Invesco KBW Bank Portfolio	36.6	35	-25	7.5	+0.4
DFNL	Davis Select Financial	36.5	64	-54	6.6	-0.5
FTXO	First Trust Nasdaq Bank	31.4	60	-50	7.6	+0.5
SPVU	Invesco S&P 500 Value	30.7	13	-3	10.2	+3.1
IWX	iShares Russell Top 200 Value	26.3	20	-10	6.6	-0.5
PWV	Invesco Dynamic Large Cap Value	25.9	55	-45	8.1	+1.0
VONV	Vanguard Russell 1000 Value	24.1	12	-2	6.8	-0.3
DUSA	Davis Select U.S. Equity	23.9	63	-53	5.1	-2.0
AMCA	iShares Russell 1000 Pure U.S. Revenue	23.9	15	-5	6.2	-0.9
IWD	iShares Russell 1000 Value	23.6	19	-9	6.6	-0.5

¹Overlap is the percentage of holdings by weight that are identical. For example, if Fund A has a 2% position in Apple, Inc. (AAPL) and Fund B has a 5% position, their overlapping position in AAPL is 2%.

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RESULTS & ESTIMATES

	2014	2015	2016	2017	2018	2019E	2020E
Sales per share	**	**	**	**	**	**	**
Earnings per share	**	**	**	**	**	**	**
Dividends per share	**	**	**	**	**	**	**
Book value per share	**	**	**	**	**	**	**

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

OTHER FUNDAMENTAL METRICS

Long term EPS growth est.	**%		Debt-to-equity	**x
Asset turnover	**%		Assets-to-equity	**x

Return on equity

Revision activity*

*Six months ago = 100

Net margins

Compound annual growth rates

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VALUATION METRICS

	2018	2019E	2020E
Price-to-sales	**	**	**
Price-to-earnings	**	**	**
Price-to-cash flow	**	**	**
Price-to-growth	**	**	**
Price-to-book value	**	**	**
Yield	**	**	**

Historical valuation trends

Forward multiple:	Vanguard Financials
Relative to:	S&P500	MSCI EAFE	MSCI Emg. Mkts.	Other ETF:

OVERWEIGHT

Above average appreciation potential. A rating of OVERWEIGHT is assigned to ETFs with ALTAR Scores in the 4th quintile (ranking higher than 60%-80%) of their category. Typically, funds in this category consist of stocks trading at attractive valuations and/or having above-average fundamentals.

ALTAR Score™

Calculation of ALTAR Score™
Avg. Return on Equity	10.4	%
Divided by: Fwd. P/BV	1.5	x
Less: Expense ratio	10	bp
Equals: ALTAR Score	7.1	%

More information on ALTAR Score™

MODERN PORTFOLIO THEORY info

CONSENSUS RECOMMENDATIONS: FUND CONSTITUENTS

COMPOSITE RATING	1.63	CATEGORY AVERAGE	1.55

The composite rating is a weighted average of analysts' consensus recommendations for individual ETF constituents, based on the following scale: BUY = 1; OVERWEIGHT = 1.5, HOLD = 2; UNDERWEIGHT = 2.5; and SELL = 3. Readers are cautioned that because analyst ratings tend to be inflated, the composite score may be more useful as a relative measure of sentiment between funds rather than as a stand-alone recommendation.