FXO vs. IAI

Last updated Jun 23, 2026

FXO (First Trust Financials AlphaDEX Fund) and IAI (iShares U.S. Broker-Dealers & Securities Exchanges ETF) are both Financials Equities funds - FXO tracks the StrataQuant Financials Index while IAI tracks the Dow Jones U.S. Select Investment Services Index. Both are passively managed. Over the past 10 years, FXO returned 13.20%/yr vs 19.89%/yr for IAI. Their correlation of 0.83 suggests significant overlap in exposure. FXO charges 0.62%/yr vs 0.38%/yr for IAI.

Performance

FXO vs. IAI - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in First Trust Financials AlphaDEX Fund (FXO) and iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, FXO achieves a 2.70% return, which is significantly lower than IAI's 4.80% return. Over the past 10 years, FXO has underperformed IAI with an annualized return of 13.20%, while IAI has yielded a comparatively higher 19.89% annualized return.

FXO

• 1D: 0.72%
• 1M: 3.42%
• YTD: 2.70%
• 6M: 0.52%
• 1Y: 16.26%
• 3Y*: 21.78%
• 5Y*: 9.95%
• 10Y*: 13.20%

IAI

• 1D: 0.32%
• 1M: 4.05%
• YTD: 4.80%
• 6M: 2.83%
• 1Y: 18.98%
• 3Y*: 30.15%
• 5Y*: 15.34%
• 10Y*: 19.89%

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

FXO vs. IAI - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
FXO First Trust Financials AlphaDEX Fund	2.70%	13.59%	27.72%	9.28%	-9.24%	37.76%	5.95%	26.31%	-11.72%	17.88%
IAI iShares U.S. Broker-Dealers & Securities Exchanges ETF	4.80%	25.80%	34.37%	15.27%	-10.87%	40.48%	18.61%	24.26%	-9.47%	28.86%

Correlation

The correlation between FXO and IAI 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	0.79
Correlation (5Y) Calculated over the trailing 5-year period	0.84
Correlation (10Y) Calculated over the trailing 10-year period	0.84
Correlation (All Time) Calculated using the full available price history since May 10, 2007	0.83

The correlation between FXO and IAI shifts across timeframes, from 0.69 (1 year) to 0.84 (10 years), reflecting how their relationship changes across market environments.

FXO vs. IAI - Sectors Allocation Comparison

Sectors	FXO	IAI
Financial Services	94.5%	99.9%
Real Estate	5.0%	-
Technology	0.6%	0.1%
Basic Materials	-	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Healthcare	-	-
Industrials	-	-
Utilities	-	-

Return for Risk

FXO vs. IAI — Risk / Return Rank

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

FXO

FXO Risk / Return Rank: 29
FXO Sharpe Ratio Rank: 30
FXO Sortino Ratio Rank: 28
FXO Omega Ratio Rank: 27
FXO Calmar Ratio Rank: 29
FXO Martin Ratio Rank: 30

IAI

IAI Risk / Return Rank: 26
IAI Sharpe Ratio Rank: 28
IAI Sortino Ratio Rank: 27
IAI Omega Ratio Rank: 26
IAI Calmar Ratio Rank: 25
IAI Martin Ratio Rank: 25

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.

FXO vs. IAI - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for First Trust Financials AlphaDEX Fund (FXO) and iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI). 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.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	FXO	IAI	Difference
Sharpe ratio: Return per unit of total volatility	1.04	0.99	+0.06
Sortino ratio: Return per unit of downside risk	1.48	1.42	+0.07
Omega ratio: Gain probability vs. loss probability	1.18	1.17	+0.01
Calmar ratio: Return relative to maximum drawdown	1.39	1.15	+0.24
Martin ratio: Return relative to average drawdown	4.15	3.28	+0.87

FXO vs. IAI - Sharpe Ratio Comparison

The current FXO Sharpe Ratio is 1.04, which is comparable to the IAI Sharpe Ratio of 0.99. The chart below compares the historical Sharpe Ratios of FXO and IAI, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

FXO vs. IAI - Drawdown Comparison

The maximum FXO drawdown since its inception was -71.30%, smaller than the maximum IAI drawdown of -75.46%. Use the drawdown chart below to compare losses from any high point for FXO and IAI.

Drawdown Indicators

	FXO	IAI	Difference
Max Drawdown Largest peak-to-trough decline	-71.30%	-75.46%	+4.16%
Max Drawdown (1Y) Largest decline over 1 year	-11.72%	-16.52%	+4.80%
Max Drawdown (3Y) Largest decline over 3 years	-21.35%	-23.14%	+1.79%
Max Drawdown (5Y) Largest decline over 5 years	-28.80%	-28.84%	+0.04%
Max Drawdown (10Y) Largest decline over 10 years	-48.55%	-40.38%	-8.17%
Current Drawdown Current decline from peak	-0.37%	-1.27%	+0.90%
Average Drawdown Average peak-to-trough decline	-13.08%	-22.61%	+9.53%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.93%	5.80%	-1.87%

Volatility

FXO vs. IAI - Volatility Comparison

The current volatility for First Trust Financials AlphaDEX Fund (FXO) is 3.92%, while iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) has a volatility of 5.58%. This indicates that FXO experiences smaller price fluctuations and is considered to be less risky than IAI based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	FXO	IAI	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.92%	5.58%	-1.66%
Volatility (6M) Calculated over the trailing 6-month period	10.98%	15.38%	-4.40%
Volatility (1Y) Calculated over the trailing 1-year period	15.66%	19.32%	-3.66%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	21.86%	21.42%	+0.44%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	24.14%	22.85%	+1.29%

FXO vs. IAI - Expense Ratio Comparison

FXO has a 0.62% expense ratio, which is higher than IAI's 0.38% expense ratio.

Dividends

FXO vs. IAI - Dividend Comparison

FXO's dividend yield for the trailing twelve months is around 2.10%, more than IAI's 1.10% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
FXO First Trust Financials AlphaDEX Fund	2.10%	1.78%	1.97%	2.98%	2.49%	1.91%	2.60%	1.72%	2.60%	1.62%	1.35%	1.51%
IAI iShares U.S. Broker-Dealers & Securities Exchanges ETF	1.10%	0.95%	1.05%	1.80%	2.14%	1.31%	1.55%	1.52%	1.58%	1.37%	1.49%	1.31%

Frequently Asked Questions

Can I hold both FXO and IAI in my portfolio?

FXO and IAI 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, FXO or IAI?

IAI has higher volatility (5.58%) compared to FXO (3.92%). In terms of maximum drawdown, FXO dropped -71.30% vs IAI's -75.46%.

Which ETF is better, FXO or IAI?

On 10-year performance, IAI leads with 19.89% vs 13.20% for FXO. On fees, IAI is cheaper at 0.38% per year. On volatility, FXO has been the lower-risk option at 3.92%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, FXO or IAI?

Over the 10-year period, IAI has performed better with a 19.89% return vs 13.20%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, FXO or IAI?

IAI is cheaper with a 0.38% expense ratio, compared with 0.62% for FXO.

Which ETF pays a higher dividend yield, FXO or IAI?

FXO has the higher dividend yield at 2.10%, compared with 1.10% for IAI.

What is the main difference between FXO and IAI?

FXO tracks StrataQuant Financials Index, while IAI tracks Dow Jones U.S. Select Investment Services Index. They also come from different issuers: First Trust and iShares. Their fees differ too: 0.62% for FXO and 0.38% for IAI.

Which has better risk-adjusted returns?

FXO currently has the higher Sharpe Ratio (1.04 vs 0.99), 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.