At a glance
FXO charges 0.6% a year, above the 0.27% average of the 8 funds most like it (the most expensive of 9). It has $1.13B in assets, the 6th largest of that group; it paid 2.2% of its price in distributions over the past 12 months, quarterly. Over the past year it returned +12.6% with distributions reinvested (S&P 500: +11.5%), 4th of those 9 funds; over three years it returned +24.3% a year. At its worst it fell 48.6% in the 2020 crash (S&P 500: 33.7%) and 23.0% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 8 months and 18 months after the lows. Its ten largest positions make up 18.1% of the fund, out of 105 in all.
The short version
First Trust Financials AlphaDEX Fund (FXO) is an ETF that tracks the StrataQuant Financials Index. The index is a rules-based selection of US financial stocks from the Russell 1000, chosen and weighted by growth and value scores rather than by company size. As a result, its top 10 holdings made up only about 18% of assets as of July 31, 2026. It charges 0.60% a year, while similar funds average 0.27%.
Price history
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FXO +12.6% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| FXO official prospectus, to Dec 31, 2024 | — | +27.84% | — | +13.07% | +11.27% | +7.95% |
| FXO price data to Oct 27, 2026 | +7.4% | +12.6% | +24.3% | +8.9% | +12.8% | +8.3% |
- Over the year to Oct 27, 2026, FXO returned +12.6%, 4th of 9 among similar funds.
- Its 5-year annualized return was +8.9% and its 10-year +12.8%.
- In the 2020 COVID crash it fell 48.6% and regained its old high 8.4 months after the low.
- Its worst full calendar year was 2008 (-39.1%); its best was 2013 (+40.7%).
- The deepest fall in its price history was 71.3% (May 24, 2007 to Mar 6, 2009), recovered by Apr 11, 2013.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +7.4% | — |
| 2025 | +13.6% | — |
| 2024 | +27.7% | +27.84% |
| 2023 | +9.3% | +9.22% |
| 2022 | -9.3% | -9.17% |
| 2021 | +37.7% | +37.59% |
| 2020 | +5.9% | +5.92% |
| 2019 | +26.3% | +26.26% |
| 2018 | -11.7% | -11.63% |
| 2017 | +17.9% | +17.92% |
| 2016 | +18.4% | +18.16% |
| 2015 | +1.2% | +1.21% |
| 2014 | +8.8% | — |
| 2013 | +40.7% | — |
| 2012 | +21.1% | — |
| 2011 | -7.6% | — |
| 2010 | +19.2% | — |
| 2009 | +33.6% | — |
| 2008 | -39.1% | — |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Lost 68.4% over that stretch · deepest drop along the way 68.9%, back to its old high 46.9 months after the low |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 48.2% over that stretch · deepest drop along the way 48.6%, back to its old high 8.4 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 17.9% over that stretch · deepest drop along the way 23%, back to its old high 17.6 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $1.0400 | |
| 2025 | $1.0800 | +0.9% |
| 2024 | $1.0700 | -17.1% |
| 2023 | $1.2900 | +26.5% |
| 2022 | $1.0200 | +15.9% |
| 2021 | $0.8800 | -1.1% |
| 2020 | $0.8900 | +53.4% |
| 2019 | $0.5800 | -17.1% |
| 2018 | $0.7000 | +40.0% |
| 2017 | $0.5000 | +35.1% |
| 2016 | $0.3700 | +2.8% |
| 2015 | $0.3600 | 0.0% |
| 2014 | $0.3600 | +32.8% |
| 2013 | $0.2710 | -7.8% |
| 2012 | $0.2940 | -10.4% |
| 2011 | $0.3280 | +77.3% |
| 2010 | $0.1850 | +40.2% |
| 2009 | $0.1320 | -40.5% |
| 2008 | $0.2220 |
What's inside
As of Jul 31, 2026, the fund held 105 securities; the ten largest made up 18.07% of assets.
| Holding | Weight | |
|---|---|---|
| MARKETAXESS HOLDINGS INC | 2.25% | |
| LINCOLN NATIONAL CORP | 2.03% | |
| FACTSET RESEARCH SYSTEMS INC | 1.80% | |
| TRAVELERS COMPANIES INC (THE) | 1.79% | |
| ALLSTATE CORP (THE) | 1.75% | |
| FIRST AMERICAN FINANCIAL CORP | 1.72% | |
| CENTRAL BANCOMPANY INC | 1.70% | |
| HARTFORD INSURANCE GROUP INC (THE) | 1.69% | |
| MGIC INVESTMENT CORP | 1.68% | |
| AMERICAN INTERNATIONAL GROUP INC | 1.66% | |
| EVEREST GROUP LTD | 1.65% | |
| ARCH CAPITAL GROUP LTD | 1.63% | |
| ASSURED GUARANTY LTD | 1.63% | |
| BERKSHIRE HATHAWAY INC | 1.61% | |
| WHITE MOUNTAINS INSURANCE GROUP LTD | 1.59% |
By country
United States 86.39%Bermuda 9.64%Switzerland 1.24%Ireland 1.16%Puerto Rico 0.96%By asset type
Stocks 99.88%RA 0.44%What changed recently
- Over the three months to Jul 31, 2026, investors withdrew a net $43.4M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: -2.55%, +7.22%, +5.35%.
How it works
FXO normally puts at least 90% of its assets into the stocks in the StrataQuant Financials Index. The index belongs to ICE Data Indices. It starts with the Russell 1000, which holds about 1,000 of the largest US stocks, and drops any that fail its share-class and trading-volume screens. Each remaining stock is scored on growth factors, value factors or both. A stock that counts as both gets the better of its two scores. The financial stocks are then ranked by score, and the index keeps whichever number is larger: the top 75% or 40 stocks.
Next, the selected stocks are split into five equal-sized groups, called quintiles, by score. Higher-scoring groups get more weight. The index provider calls this a "modified equal-dollar" approach. It spreads money more evenly than a fund weighted by market value. As of July 31, 2026, the fund held 105 stocks. The largest were MarketAxess (2.3%), Lincoln National (2.0%), FactSet (1.8%), Travelers (1.8%) and Allstate (1.7%).
The index is rebuilt and rebalanced every quarter, and the fund follows shortly after. Turnover, the share of the portfolio replaced in a year, was 90%. The fund doesn't use leverage or options. The index provider can add, remove or swap stocks at its discretion.
What it really costs
- FXO charges 0.6% a year, versus an average of 0.27% for the similar funds below (9th of 9, cheapest first).
- Of that, 0.5% is the management fee; the rest covers other fund expenses.
In a retirement portfolio
It is a single-sector fund with a higher-than-average fee and a history of very deep drops, so it fits better as a small side position than as a portfolio's foundation.
FXO could add a rules-based, broadly spread mix of US banks, insurers and other financial firms alongside a broad stock fund. The price of that has been steep drops. In the 2008 financial crisis it fell 68.9% and didn't regain its peak until January 2013. In the 2020 COVID crash it lost 48.6% in about a month, then recovered by December 2020. In the 2022 bear market it fell 23% and took about 18 months to recover. Its worst calendar year was 2008, at -39.1%. Anyone forced to sell shares during those stretches would have locked in large losses. The yield was 2.2% as of October 27, 2026, paid quarterly. The 0.60% expense ratio is more than double the 0.27% average for similar funds. Past results don't predict the future, and a retirement plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors wanting financial-sector exposure spread across about 105 stocks, with no single holding above roughly 2.3% as of July 31, 2026.
- Those willing to pay 0.60% a year for a growth-and-value scoring method instead of a plain market-value weighting.
- Long-horizon holders who could sit through declines like the 68.9% fall in 2008 and the 48.6% drop in 2020.
Look elsewhere if
- Cost-focused investors: XLF charges 0.08% and VFH 0.09%, against FXO's 0.60%, which ranks last among nine similar funds.
- Anyone who may need to sell in a downturn, since recovering from the 2008 crash took until early 2013.
- Investors wanting a fund weighted toward the sector's largest companies, or low turnover, since FXO replaced about 90% of its holdings in a year.
Close alternatives
Matched by holdings overlap from the latest N-PORT reports.
| Fund | Overlap | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| FXO this fund | — | 0.6% | $1.13B | +12.6% | +24.3% |
| RSPF Invesco S&P 500 Equal Weight Financials ETF | 36% | 0.4% | $304.7M | +7.7% | +21.1% |
| IYF iShares U.S. Financials ETF | 32% | 0.39% | $4.43B | +6.7% | +24.4% |
| IAK iShares U.S. Insurance ETF | 26% | 0.39% | $421.5M | +17.4% | +19.3% |
| FNCL Fidelity MSCI Financials Index ETF | 26% | 0.084% | $2.38B | +6.5% | +23.6% |
| VFH Vanguard Financials ETF | 26% | 0.09% | $14.77B | +10.0% | +23.4% |
| KBE SPDR S&P Bank ETF | 23% | 0.35% | $1.48B | +17.1% | +27.2% |
| KBWP Invesco KBW Property & Casualty Insurance E… | 22% | 0.35% | $283.8M | +16.6% | +18.7% |
Questions investors ask
What does FXO invest in?
FXO invests in US financial stocks picked from the Russell 1000 by the StrataQuant Financials Index. The index scores each stock on growth and value factors and keeps the higher-ranked ones. As of July 31, 2026, the fund held 105 stocks. The largest were MarketAxess, Lincoln National, FactSet, Travelers and Allstate, each around 1.7% to 2.3% of assets. About 86% was in US companies and nearly 10% in Bermuda-based insurers such as Everest Group and Arch Capital.
What is FXO's expense ratio?
FXO's expense ratio is 0.60% a year, according to its prospectus filed November 28, 2025. Of that, 0.50% is the management fee. That puts it last on cost among nine similar financial-sector funds, which average 0.27%. Broad financials funds such as the Financial Select Sector SPDR Fund (XLF, 0.08%) and Vanguard Financials ETF (VFH, 0.09%) cost far less. FXO's higher fee pays for its factor-based stock selection and quarterly rebalancing.
What's the difference between FXO and RSPF?
Both spread money more evenly than market-value-weighted sector funds, but they choose stocks differently. RSPF, the Invesco S&P 500 Equal Weight Financials ETF, holds financial stocks from the S&P 500. FXO picks from the larger Russell 1000 using growth and value scores. About 36% of their holdings overlap. RSPF costs 0.40% against FXO's 0.60%. As of October 27, 2026, FXO's one-year return was 12.6%, compared with RSPF's 7.7%.
Does FXO pay dividends?
Yes. FXO pays dividends quarterly. Its trailing 12-month yield was 2.2% as of October 27, 2026, or about $1.40 per share over that period. The dividends come from the banks, insurers and other financial companies it holds, so the amount can change from one payment to the next. The fund isn't built mainly for income. Its stock selection focuses on growth and value scores, not on dividend yield.
How has FXO performed over 10 years?
Through December 31, 2024, FXO returned an average of 11.27% a year over 10 years, and 13.07% a year over five years, according to its prospectus. Based on price data as of October 27, 2026, its 10-year annualized return was 12.8%. The ride was uneven. It lost 11.63% in 2018 and 9.17% in 2022, and it fell 36.22% in the first quarter of 2020 alone.