5 min read
By Ron Koren, ETF Insider


When it comes to navigating the complex world of finance, investors often face the daunting task of choosing the right investment strategy. In this article, we'll dive into the battle of RYF vs. VFH and explore the key factors that can help you make informed decisions.

RYF VS VFH: Sector Allocation and Top Holdings

One of the fundamental differences between RYF (iShares Select Dividend ETF) and VFH (Vanguard Financials ETF) lies in their sector allocations and top holdings. RYF predominantly focuses on dividend-paying stocks, making it an attractive option for income-seeking investors. On the other hand, VFH is all about financials, offering exposure to companies within the financial sector.
RYF's top holdings include well-established dividend giants such as AT&T, ExxonMobil, and Chevron. These companies are known for their stable dividend payments over time. In contrast, VFH's top holdings feature financial sector heavyweights like JPMorgan Chase, Berkshire Hathaway, and Bank of America.
Investors seeking dividend income might lean towards RYF for its consistent payout history. In contrast, those bullish on the financial sector's growth prospects may favor VFH.

RYF overlap RYF VS VFHRYF overlap RYF VS VFH

RYF VS VFH: Capitalization Strategy

Understanding the capitalization strategy of these ETFs is crucial for investors. RYF adopts a strategy that primarily targets mid-cap and large-cap dividend-paying stocks. This approach provides a balance between stability and growth potential. Mid-cap stocks offer room for expansion, while large-cap stocks provide stability.
VFH, on the other hand, focuses on large-cap stocks within the financial sector. These companies are often considered more stable but may offer limited growth compared to mid-cap stocks.
Investors with a preference for stable, established companies might find VFH appealing, while those looking for a mix of growth and stability could opt for RYF.

RYF VS VFH: Tracking and Exposure

Tracking an ETF's performance compared to its underlying index is crucial. RYF aims to track the Dow Jones U.S. Select Dividend Index, which includes high dividend-yielding stocks. This means that RYF's performance closely mirrors the movements of dividend-paying companies in the U.S.
VFH, on the other hand, seeks to replicate the performance of the MSCI US Investable Market Financials 25/50 Index. Investors in VFH are essentially betting on the overall health and growth of the U.S. financial sector.
It's important to note that both RYF and VFH provide exposure to their respective sectors, but their performance will depend on the performance of the underlying indexes. If you have a strong conviction about the future prospects of either dividend-paying stocks or the financial sector, your choice between RYF and VFH becomes clearer.


In the battle of RYF vs. VFH, the choice ultimately depends on your investment goals and risk tolerance. RYF offers a dividend-focused approach with exposure to mid-cap and large-cap stocks, making it suitable for income-seeking investors looking for stability and growth potential. In contrast, VFH concentrates on large-cap stocks within the financial sector, appealing to those bullish on the financial industry's future.
Before making a decision, carefully assess your investment objectives, time horizon, and risk tolerance. It's also wise to diversify your portfolio to spread risk and capture different market opportunities.
Remember that investing always carries some degree of risk, and past performance is not indicative of future results. It's essential to conduct thorough research, stay informed about market trends, and consider seeking advice from financial professionals to make the best investment choices for your unique circumstances.


  • iShares by BlackRock: RYF
  • Vanguard: VFH
  • Dow Jones U.S. Select Dividend Index
  • MSCI US Investable Market Financials 25/50 Index

RYF ETF issuer
RYF ETF official page

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