Under The Hood: First Trust Financials AlphaDEX

When it comes to ETFs tracing financials, particularly U.S.-based banks and brokers, the big kid on the block is the Financial Select Sector SPDR

. Other ETFs that track financials that investors are probably familiar with include the Vanguard Financials ETF

, the SPDR KBW Bank ETF

and the iShares Dow Jones US Financial Sector

. Absent from that list is today's under the hood candidate, the First Trust Financials AlphaDEX ETF

. Right off the bat, the knock on FXO is an expense ratio of 0.7%, which is higher than most comparable ETFs for this sector. Then again, there may not be an ETF that is truly comparable to FXO. The 151-stock ETF covers all of the financial sector bases, but ETFs like XLF or VFH focus almost entirely on big money center banks and brokerage firms. FXO is also worth a look because its holdings are not heavily concentrated in just two or three names. MBIA

is the ETF's top holding, but gets a weight of just 1.83%. The ETF also offers exposure to diversified financials like Leucadia National

, insurance firms such as Everest Re

and more traditional financial fare such as JPMorgan Chase

and Goldman Sachs

. Assets under management are solid at close to $340.7 million and volume of almost 466,000 shares assures FXO is here to stay. Financials are showing signs of life and if FXO can break resistance at $15, it could be off to the races for this ETF. FXO looks like a good trade with sub-sector diversity that's hard to beat.