VFH vs. FXO

Last updated Aug 5, 2026

VFH (Vanguard Financials ETF) and FXO (First Trust Financials AlphaDEX Fund) are both Financials Equities funds - VFH tracks the MSCI US Investable Market Financials 25/50 Index while FXO tracks the StrataQuant Financials Index. Both are passively managed. Over the past 10 years, VFH returned 13.37%/yr vs 13.29%/yr for FXO. Their correlation of 0.90 means they have usually moved in the same direction. VFH charges 0.09%/yr vs 0.62%/yr for FXO.

Performance

VFH vs. FXO - Performance Comparison

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

Returns By Period

In the year-to-date period, VFH achieves a 7.22% return, which is significantly lower than FXO's 12.28% return. Both investments have delivered pretty close results over the past 10 years, with VFH having a 13.37% annualized return and FXO not far behind at 13.29%.

VFH

• 1D: 0.89%
• 1M: 4.10%
• 6M: 9.11%
• YTD: 7.22%
• 1Y: 13.83%
• 3Y*: 20.82%
• 5Y*: 11.42%
• 10Y*: 13.37%
• ALL TIME*: 7.02%

FXO

• 1D: 0.71%
• 1M: 4.66%
• 6M: 10.72%
• YTD: 12.28%
• 1Y: 20.77%
• 3Y*: 20.31%
• 5Y*: 11.44%
• 10Y*: 13.29%
• ALL TIME*: 8.63%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
FXO First Trust Financials AlphaDEX Fund	$3.33M	$3.32M	$3.46M
VFH Vanguard Financials ETF	$53.77M	$71.76M	$72.54M

VFH vs. FXO - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VFH Vanguard Financials ETF	7.22%	14.91%	30.44%	14.17%	-12.31%	35.22%	-1.96%	31.57%	-13.52%	19.99%
FXO First Trust Financials AlphaDEX Fund	12.28%	13.59%	27.72%	9.28%	-9.24%	37.76%	5.95%	26.31%	-11.72%	17.88%

Correlation

The correlation between VFH and FXO is 0.90, meaning they have usually moved in the same direction, including during past declines.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.90
Correlation (3Y) Balances recent behavior with more history.	0.93
Correlation (5Y) Shows whether the relationship held over a longer period.	0.95
Correlation (10Y) Provides a long-term view across more market conditions.	0.94
Correlation (All Time) Calculated using the full available price history since May 10, 2007	0.90

The correlation between VFH and FXO has been stable across timeframes, ranging from 0.90 to 0.95 - a consistent structural relationship.

VFH vs. FXO - Sectors Allocation Comparison

Sectors	VFH	FXO
Financial Services	97.0%	94.8%
Technology	2.0%	0.5%
Real Estate	0.8%	4.8%
Industrials	0.2%	-
Healthcare	0.1%	-
Communication Services	0.0%	-
Consumer Cyclical	0.0%	-
Basic Materials	-	-
Consumer Defensive	-	-
Energy	-	-
Utilities	-	-

Return for Risk

VFH vs. FXO — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

VFH

VFH Risk / Return Rank: 31
VFH Sharpe Ratio Rank: 34
VFH Sortino Ratio Rank: 32
VFH Omega Ratio Rank: 32
VFH Calmar Ratio Rank: 27
VFH Martin Ratio Rank: 27

FXO

FXO Risk / Return Rank: 45
FXO Sharpe Ratio Rank: 48
FXO Sortino Ratio Rank: 46
FXO Omega Ratio Rank: 45
FXO Calmar Ratio Rank: 44
FXO Martin Ratio Rank: 43

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

VFH vs. FXO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Financials ETF (VFH) and First Trust Financials AlphaDEX Fund (FXO). 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.

	VFH	FXO	Difference
Sharpe ratio: Return per unit of total volatility	0.93	1.35	-0.42
Sortino ratio: Return per unit of downside risk	1.34	1.90	-0.56
Omega ratio: Gain probability vs. loss probability	1.17	1.24	-0.07
Calmar ratio: Return relative to maximum drawdown	0.94	1.78	-0.84
Martin ratio: Return relative to average drawdown	2.45	5.33	-2.88

VFH vs. FXO - Sharpe Ratio Comparison

The current VFH Sharpe Ratio is 0.93, which is lower than the FXO Sharpe Ratio of 1.35. The chart below compares the historical Sharpe Ratios of VFH and FXO, 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

VFH vs. FXO - Drawdown Comparison

The maximum VFH drawdown since its inception was -78.61%, which is greater than FXO's maximum drawdown of -71.30%. Use the drawdown chart below to compare losses from any high point for VFH and FXO.

Drawdown Indicators

	VFH	FXO	Difference
Max Drawdown Largest peak-to-trough decline	-78.61%	-71.30%	-7.31%
Max Drawdown (1Y) Largest decline over 1 year	-14.75%	-11.72%	-3.03%
Max Drawdown (3Y) Largest decline over 3 years	-17.30%	-21.35%	+4.05%
Max Drawdown (5Y) Largest decline over 5 years	-25.66%	-28.80%	+3.14%
Max Drawdown (10Y) Largest decline over 10 years	-44.42%	-48.55%	+4.13%
Current Drawdown Current decline from peak	0.00%	0.00%	0.00%
Average Drawdown Average peak-to-trough decline	-18.42%	-13.01%	-5.41%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.67%	3.91%	+1.76%

Volatility

VFH vs. FXO - Volatility Comparison

The current volatility for Vanguard Financials ETF (VFH) is 3.94%, while First Trust Financials AlphaDEX Fund (FXO) has a volatility of 4.15%. This indicates that VFH experiences smaller price fluctuations and is considered to be less risky than FXO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VFH	FXO	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.94%	4.15%	-0.21%
Volatility (6M) Calculated over the trailing 6-month period	11.22%	11.07%	+0.15%
Volatility (1Y) Calculated over the trailing 1-year period	14.96%	15.51%	-0.55%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.13%	21.72%	-2.59%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.48%	24.06%	-1.58%

VFH vs. FXO - Expense Ratio Comparison

VFH has a 0.09% expense ratio, which is lower than FXO's 0.62% expense ratio.

Dividends

VFH vs. FXO - Dividend Comparison

VFH's dividend yield for the trailing twelve months is around 1.64%, less than FXO's 1.95% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
FXO First Trust Financials AlphaDEX Fund	1.95%	1.78%	1.97%	2.98%	2.49%	1.91%	2.60%	1.72%	2.60%	1.62%	1.35%	1.51%
VFH Vanguard Financials ETF	1.64%	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 FXO in my portfolio?

With a correlation of 0.90, VFH and FXO move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, VFH or FXO?

FXO has higher volatility (4.15%) compared to VFH (3.94%). In terms of maximum drawdown, VFH dropped -78.61% vs FXO's -71.30%.

Which ETF is better, VFH or FXO?

On 10-year performance, VFH leads with 13.37% vs 13.29% for FXO. On fees, VFH is cheaper at 0.09% per year. On volatility, VFH has been the lower-risk option at 3.94%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VFH or FXO?

Over the 10-year period, VFH has performed better with a 13.37% return vs 13.29%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VFH or FXO?

VFH is cheaper with a 0.09% expense ratio, compared with 0.62% for FXO.

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

FXO has the higher dividend yield at 1.95%, compared with 1.64% for VFH.

What is the main difference between VFH and FXO?

VFH tracks MSCI US Investable Market Financials 25/50 Index, while FXO tracks StrataQuant Financials Index. They also come from different issuers: Vanguard and First Trust. Their fees differ too: 0.09% for VFH and 0.62% for FXO.

Which has better risk-adjusted returns?

FXO currently has the higher Sharpe Ratio (1.35 vs 0.93), 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.