FXO - ETF AI Analysis

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First Trust Financials AlphaDEX Fund (FXO)

Rating:73Outperform

Price Target:―

FXO, the First Trust Financials AlphaDEX Fund, earns a solid overall rating thanks to several strong financial and insurance holdings like Arch Capital Group, Renaissancere Holdings, and SEI Investments, which show robust earnings, effective capital management, and supportive technical trends. Additional contributors such as Bank of New York Mellon, Invesco, Allstate, and First American Financial add to the fund’s quality through revenue growth, strategic use of technology, and generally reasonable valuations, though some names like Citigroup, Bank OZK, and Axis Capital face technical weakness, asset quality, or cash flow concerns that slightly temper the fund’s overall strength. The main risk factor is its concentration in the financial sector, which can make the ETF more sensitive to interest rate changes, credit conditions, and broader economic cycles.

Positive Factors

Broad Financials Exposure

The fund holds many different financial companies, which helps spread risk across the sector instead of relying on just a few names.

Generally Strong Top Holdings

Most of the top positions have shown positive year-to-date performance, which has supported the fund’s overall results.

Meaningful Fund Size

The ETF manages a sizable pool of assets, which can help with trading liquidity and reduce the chance of the fund being closed.

Negative Factors

High Sector Concentration

With almost all assets in financial and related real estate stocks, the fund is heavily exposed to downturns in the financial sector.

Limited Geographic Diversification

The ETF invests almost entirely in U.S. companies, offering little protection if the U.S. market or economy weakens.

Above-Average Expense Ratio

The fund charges a relatively high fee for an ETF, which can eat into long-term returns compared with lower-cost alternatives.

FXO vs. SPDR S&P 500 ETF (SPY)

AUM1.12B

RegionNorth America

Expense Ratio0.60%

Beta0.92

IssuerFirst Trust

Inception DateMay 08, 2007

Dividend Yield1.9%

Asset ClassEquity

Index TrackedStrataQuant Financials Index

Share Statistics

EPS (TTM)N/A

Shares OutstandingN/A

10 Day Avg. Volume2,037,845

30 Day Avg. Volume464,893

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

71.41

Price Target Upside― Downside

Rating ConsensusModerate Buy

Number of Analyst Covering105

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

FXO Summary

FXO is an exchange-traded fund (ETF) that focuses on U.S. financial companies by tracking the StrataQuant Financials Index. It holds a mix of banks, insurance firms, and investment managers, including well-known names like T. Rowe Price and Bank of New York Mellon. Investors might consider FXO if they want targeted exposure to the financial sector and a way to diversify beyond just tech or broad market funds. However, this ETF can be risky because it is heavily tied to financial stocks, which can rise or fall sharply with interest rates and the overall economy.

How much will it cost me?The ETF FXO has an expense ratio of 0.62%, which means you’ll pay $6.20 per year for every $1,000 invested. This is higher than average because FXO is actively managed, using a proprietary strategy to select stocks with strong growth and value characteristics.

What would affect this ETF?FXO's performance could benefit from rising interest rates, as higher rates often improve profitability for banks and financial institutions, which dominate its holdings. However, economic downturns or stricter regulations in the financial sector could negatively impact the ETF, especially given its concentrated exposure to U.S.-based financial companies. Additionally, trends in fintech innovation and consumer demand for financial services may drive growth for top holdings like SoFi and Interactive Brokers.

FXO Top 10 Holdings

FXO is very much a financials story, with U.S. banks and insurers in the driver’s seat. Renaissancere and Arch Capital are doing the heavy lifting, rising on strong earnings and solid balance sheets, while Bank OZK and First American Financial add steady momentum from the regional banking and insurance side. On the flip side, Invesco has been lagging recently, taking a bit of shine off the asset-management slice, and Allstate’s mixed trading tone has kept it from fully pulling its weight. Overall, performance is driven by a diversified but clearly finance-focused lineup.

Name	Company Name	Weight %	Market Value	Market Cap	Yearly Gain	Overall Rating
FAF	First American Financial	1.85%	$20.14M	$6.47B	2.38%	74 Outperform
RNR	Renaissancere Holdings	1.84%	$20.12M	$12.65B	23.80%	78 Outperform
BK	Bank of New York Mellon	1.80%	$19.65M	$80.45B	45.02%	75 Outperform
ACGL	Arch Capital Group	1.77%	$19.27M	$33.73B	6.34%	79 Outperform
ALL	Allstate	1.76%	$19.22M	$53.36B	3.70%	74 Outperform
SEIC	SEI Investments Company	1.73%	$18.91M	$9.74B	7.91%	79 Outperform
OZK	Bank OZK	1.71%	$18.60M	$4.98B	0.11%	70 Outperform
AGO	Assured Guaranty	1.67%	$18.26M	$3.79B	0.27%	73 Outperform
C	Citigroup	1.67%	$18.22M	$191.01B	60.69%	68 Neutral
AXS	Axis Capital	1.67%	$18.18M	$7.39B	8.66%	70 Neutral

FXO Technical Analysis

Technical Analysis Sentiment

Negative

Last Price―

Price Trends

50DMA

60.43

Negative

100DMA

59.44

Negative

200DMA

58.03

Negative

Market Momentum

MACD

-0.92

Positive

RSI

31.23

Neutral

STOCH

22.53

Neutral

Evaluating momentum and price trends is crucial in ETF analysis to make informed investment decisions. For FXO, the sentiment is Negative. The current price of undefined is equal to the 20-day moving average (MA) of 59.31, equal to the 50-day MA of 60.43, and equal to the 200-day MA of 58.03, indicating a bearish trend. The MACD of -0.92 indicates Positive momentum. The RSI at 31.23 is Neutral, neither overbought nor oversold. The STOCH value of 22.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FXO.

FXO Peer Comparison

Comparison Results

Name	Price	Price Target	AUM	Expense Ratio	Overall Rating
FXO	―	―	$1.12B	0.60%	73 Outperform
KBWB	―	―	$5.29B	0.35%	74 Outperform
IYF	―	―	$3.60B	0.38%	72 Outperform
FNCL	―	―	$2.24B	0.08%	72 Outperform
IYG	―	―	$1.91B	0.38%	72 Outperform
KBE	―	―	$1.30B	0.35%	73 Outperform

Performance Comparison

FXO

First Trust Financials AlphaDEX Fund

55.88

5.89

11.78%

KBWB

Invesco KBW Bank ETF

―

IYF

iShares U.S. Financials ETF

―

FNCL

Fidelity MSCI Financials Index ETF

―

IYG

iShares US Financial Services ETF

―

KBE

SPDR S&P Bank ETF

―

Glossary

BuyAn ETF rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the ETF is likely to deliver higher returns compared to other ETFs in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldAn ETF rated as a "Hold" s expected to perform in line with the overall market or a specific benchmark. This rating indicates that the ETF is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellAn ETF rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the ETF may deliver lower returns compared to other ETFs in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst ETF Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in ETFs carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: ―

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