This sector ETF has delivered solid though not spectacular performance this year.

It could be a nice complement to portfolios that are heavily allocated to growth sectors.

The fund offers exposure to a sector where shareholder rewards are improving.

10 stocks we like better than Vanguard World Fund - Vanguard Financials ETF ›

With less than two months left in 2025, it’s safe to say this will go down as another year in which growth stocks sharply outperformed value counterparts. Those are the breaks when investors are fawning over glamour names, including the “Magnificent Seven.”

Here’s the tale of the tape. An investor who bought a basic value fund, say one tracking the S&P 500 Value Index, at the start of the year might be satisfied with the roughly 11% returns generated by that fund. That satisfaction is likely to evaporate upon learning that a plain-vanilla fund tracking the S&P 500 Growth index is up more than 24% year to date.

That growth/value chasm underscores the importance of being choosy regarding direct allocations to specific value sectors. Fortunately, the **Vanguard Financials ETF **(NYSEMKT: VFH) indulges that selectivity, and it could be a solid idea for cash-constrained investors looking to diversify their growth-heavy portfolios.

This Vanguard sector ETF is great for cash-conscious investors and provides some Warren Buffett exposure, too. Image source: Getty Images.

For what it lacks in exposure to story stocks, this financial services ETF makes up for it with a portfolio chock-full of familiar names, including Warren Buffett’s Berkshire Hathaway. In fact, the Vanguard ETF’s nearly 8% weight to Buffett’s conglomerate is one of the reasons I like this fund.

Indeed, the stock has been a drag on the ETF this year, returning a mere 7.2% amid concerns about the company’s rising cash stockpile and lack of share repurchases. At the end of the third quarter, Berkshire held a staggering $381 billion in cash, and that period marked the 12th straight quarter in which the company was a net seller of stocks.

Many market participants view Berkshire’s hoarding of cash as Buffett saying there’s no value to be had in stocks or, worse, he’s battening down the hatches in preparation for a bear market. There are other perspectives to consider regarding Berkshire’s cash is king posture. Notably, Buffett retires at the end of this year with Greg Abel officially taking the helm at the start of 2026, so it’s possible that some dry powder is being set aside for when Abel is running the Berkshire show.

Berkshire’s tepid year-to-date showing may also be attributable to investors focusing more on the cash position than the company’s execution. For example, operating profit jumped 33% in the September quarter.