VFH vs. MS

Last updated Jun 9, 2026

VFH (Vanguard Financials ETF) is Financials Equities fund tracking the MSCI US Investable Market Financials 25/50 Index, while MS (Morgan Stanley) is a stock. Over the past 10 years, VFH returned 12.59%/yr vs 27.13%/yr for MS. A 0.79 correlation means they provide meaningful diversification when combined.

Performance

VFH vs. MS - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Financials ETF (VFH) and Morgan Stanley (MS). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VFH achieves a -4.26% return, which is significantly lower than MS's 20.86% return. Over the past 10 years, VFH has underperformed MS with an annualized return of 12.59%, while MS has yielded a comparatively higher 27.13% annualized return.

VFH

• 1D: -0.53%
• 1M: 1.01%
• YTD: -4.26%
• 6M: -1.64%
• 1Y: 4.15%
• 3Y*: 18.86%
• 5Y*: 8.65%
• 10Y*: 12.59%

MS

• 1D: 0.15%
• 1M: 9.92%
• YTD: 20.86%
• 6M: 21.34%
• 1Y: 64.89%
• 3Y*: 39.40%
• 5Y*: 21.89%
• 10Y*: 27.13%

*Multi-year figures are annualized to reflect compound growth (CAGR)

VFH vs. MS - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VFH Vanguard Financials ETF	-4.26%	14.91%	30.44%	14.17%	-12.31%	35.22%	-1.96%	31.57%	-13.52%	19.99%
MS Morgan Stanley	20.86%	45.16%	39.73%	13.93%	-10.34%	46.65%	38.09%	32.67%	-22.76%	26.61%

Correlation

The correlation between VFH and MS is 0.69, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.69
Correlation (3Y) Calculated over the trailing 3-year period	0.74
Correlation (5Y) Calculated over the trailing 5-year period	0.79
Correlation (10Y) Calculated over the trailing 10-year period	0.83
Correlation (All Time) Calculated using the full available price history since Feb 2, 2004	0.79

The correlation between VFH and MS shifts across timeframes, from 0.69 (1 year) to 0.83 (10 years), reflecting how their relationship changes across market environments.

Return for Risk

VFH vs. MS — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

VFH

VFH Risk / Return Rank: 13
VFH Sharpe Ratio Rank: 14
VFH Sortino Ratio Rank: 13
VFH Omega Ratio Rank: 13
VFH Calmar Ratio Rank: 13
VFH Martin Ratio Rank: 13

MS

MS Risk / Return Rank: 90
MS Sharpe Ratio Rank: 93
MS Sortino Ratio Rank: 90
MS Omega Ratio Rank: 91
MS Calmar Ratio Rank: 86
MS Martin Ratio Rank: 90

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

VFH vs. MS - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Financials ETF (VFH) and Morgan Stanley (MS). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	VFH	MS	Difference
Sharpe ratio: Return per unit of total volatility	0.28	2.55	-2.27
Sortino ratio: Return per unit of downside risk	0.48	3.16	-2.68
Omega ratio: Gain probability vs. loss probability	1.06	1.43	-0.37
Calmar ratio: Return relative to maximum drawdown	0.28	3.46	-3.18
Martin ratio: Return relative to average drawdown	0.74	11.46	-10.72
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VFH vs. MS - Sharpe Ratio Comparison

The current VFH Sharpe Ratio is 0.28, which is lower than the MS Sharpe Ratio of 2.55. The chart below compares the historical Sharpe Ratios of VFH and MS, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VFH	MS	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.28	2.55	-2.27
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.45	0.77	-0.32
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.56	0.86	-0.30
Sharpe Ratio (All Time) Calculated using the full available price history	0.24	0.29	-0.05

Drawdowns

VFH vs. MS - Drawdown Comparison

The maximum VFH drawdown since its inception was -78.61%, smaller than the maximum MS drawdown of -88.12%. Use the drawdown chart below to compare losses from any high point for VFH and MS.

Drawdown Indicators

	VFH	MS	Difference
Max Drawdown Largest peak-to-trough decline	-78.61%	-88.12%	+9.51%
Max Drawdown (1Y) Largest decline over 1 year	-14.75%	-18.83%	+4.08%
Max Drawdown (3Y) Largest decline over 3 years	-17.30%	-29.24%	+11.94%
Max Drawdown (5Y) Largest decline over 5 years	-25.66%	-32.38%	+6.72%
Max Drawdown (10Y) Largest decline over 10 years	-44.42%	-51.33%	+6.91%
Current Drawdown Current decline from peak	-7.17%	-2.76%	-4.41%
Average Drawdown Average peak-to-trough decline	-18.53%	-33.70%	+15.17%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.60%	5.68%	-0.08%

Volatility

VFH vs. MS - Volatility Comparison

The current volatility for Vanguard Financials ETF (VFH) is 4.28%, while Morgan Stanley (MS) has a volatility of 8.06%. This indicates that VFH experiences smaller price fluctuations and is considered to be less risky than MS based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VFH	MS	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.28%	8.06%	-3.78%
Volatility (6M) Calculated over the trailing 6-month period	11.34%	21.21%	-9.87%
Volatility (1Y) Calculated over the trailing 1-year period	14.98%	25.62%	-10.64%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.34%	28.72%	-9.38%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.56%	31.51%	-8.95%

Dividends

VFH vs. MS - Dividend Comparison

VFH's dividend yield for the trailing twelve months is around 1.53%, less than MS's 1.88% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
MS Morgan Stanley	1.88%	2.17%	2.82%	3.49%	3.47%	2.14%	2.04%	2.54%	2.77%	1.72%	1.66%	1.73%
VFH Vanguard Financials ETF	1.53%	1.55%	1.75%	2.08%	2.31%	1.87%	2.21%	2.17%	2.30%	1.53%	1.63%	2.00%

Frequently Asked Questions

Can I hold both VFH and MS in my portfolio?

VFH and MS have a correlation of 0.69, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VFH or MS?

MS has higher volatility (8.06%) compared to VFH (4.28%). In terms of maximum drawdown, VFH dropped -78.61% vs MS's -88.12%.

Which has better risk-adjusted returns?

MS currently has the higher Sharpe Ratio (2.55 vs 0.28), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.