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)	$7,499
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	420
Wgt avg mkt cap (mns)	$149,321
Large cap (>$10bn)	82.4%
Mid cap ($2-10bn)	12.8%
Small cap (<$2bn)	4.8%
Developed mkts	100.0%
Emerging mkts	0.0%

TOP TEN HOLDINGS
Total	43.4 %
JPMORGAN CHASE & CO	10.2 %
BANK OF AMERICA CORP	7.2 %
BERKSHIRE HATHAWAY INC-CL B	6.9 %
WELLS FARGO & CO	5.5 %
CITIGROUP INC	4.2 %
US BANCORP	2.1 %
AMERICAN EXPRESS CO	2.1 %
GOLDMAN SACHS GROUP INC	1.8 %
CME GROUP INC	1.7 %
CHUBB LIMITED	1.7 %

TOP COUNTRY EXPOSURE
	UNITED STATES	93.8 %
	BRITAIN	1.8 %
	SWITZERLAND	1.7 %
	BERMUDA	1.5 %
	PUERTO RICO	0.2 %
	CAYMAN ISLANDS	0.1 %

HISTORICAL PERFORMANCE info

	Custom date range	Compare to
	thru

Standardized Annual Returns (thru October 31)
Year-to-date	1 year	5 years	10 years	Since Incep.
22.5%	11.5%	10.4%	11.9%	4.5%

Market Correlations
versus...	Beta	R-squared
S&P500	1.18	68%
MSCI EAFE	0.89	33%
MSCI Emg. Mkts.	0.56	22%

Technical Indicators
Recent close	$73.70
30d moving avg.	$70.96
Annualized volatility	17.2%
Short interest (ETF)	0.2%
Short interest (Underlying)	2.2%
Relative strength (RSI)	75

Liquidity measures
Avg. volume (thou.)	470
Turnover	0.5%
Bid/Ask (% of price)	0.03%
ADV underlying (mns)	$19,345

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™:

7.4%

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	98.7	8	2	7.5	+0.0
XLF	Financials Select Sector SPDR	79.5	13	-3	7.1	-0.3
IEFN	iShares Evolved U.S. Financials	72.4	18	-8	7.5	+0.0
RWW	Invesco S&P Financials Revenue	68.6	45	-35	7.4	-0.0
IYF	iShares DJ US Financials	68.2	42	-32	6.2	-1.2
JHMF	John Hancock Multifactor Financials	65.9	40	-30	6.7	-0.7
IYG	iShares DJ US Financial Services	65.7	42	-32	6.5	-0.9
RYF	Invesco S&P Equal Weight Financials	51.0	40	-30	7.5	+0.1
IXG	iShares S&P Global Financial Sector	48.4	46	-36	8.4	+1.0
DFNL	Davis Select Financial	37.9	64	-54	6.8	-0.6
KBWB	Invesco KBW Bank Portfolio	37.5	35	-25	7.8	+0.3
FXO	First Trust Financial Alphadex	34.1	63	-53	8.0	+0.6
FTXO	First Trust Nasdaq Bank	32.6	60	-50	7.8	+0.4
SPVU	Invesco S&P 500 Value	31.8	13	-3	11.1	+3.7
IWX	iShares Russell Top 200 Value	26.6	20	-10	7.0	-0.4
PWV	Invesco Dynamic Large Cap Value	25.0	55	-45	8.0	+0.5
AMCA	iShares Russell 1000 Pure U.S. Revenue	24.7	15	-5	6.6	-0.9
KBE	KBW Bank ETF	24.2	35	-25	8.3	+0.9
IWD	iShares Russell 1000 Value	24.1	19	-9	7.0	-0.4
DUSA	Davis Select U.S. Equity	24.0	63	-53	5.1	-2.3

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	1.4	x
Less: Expense ratio	10	bp
Equals: ALTAR Score	7.4	%

More information on ALTAR Score™

MODERN PORTFOLIO THEORY info

CONSENSUS RECOMMENDATIONS: FUND CONSTITUENTS

COMPOSITE RATING	1.61	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.