This Week in ETF Reports

First Trust Sector Model Change
There are two additions to the First Trust Sector Model FTRUST this week, and both are Energy.  The First Trust Energy AlphaDEX ETF FXN and the First Trust Nasdaq Oil & Gas ETF FTXN were both added to the Sector Model.  The addition of FXN and FTXN continues the rotation into the broader Energy sector that began last week with the addition of the First Trust Natural Gas ETF FCG, and is the second time we have seen a notable increase in the Energy exposure this year.  That last time FXN and FTXN were members of the Model was from late April until the end of June/beginning of July.  The addition of FXN and FTXN increases the number of holdings in the model to 15... (Read more)

SSTREET Change
As a refresher, the State Street Sector Model SSTREET monitors the Relative Strength (RS) relationships between each of the sector and industry ETFs in the model universe versus the S&P 500 Index SPX on a 6.5% scale. ETFs that are showing positive RS versus the SPX (measured by a column of Xs) are included in the model and are removed only when that relationship reverses into Os. Over the past week of trading, the respective RS charts comparing the SPDR S&P Oil & Gas Exploration & Production ETF XOP and the Energy Select Sector SPDR Fund XLE versus the S&P 500 Index reversed up into Xs, warranting their additions to the SSTREET model. This model remains fully invested through sector-based ETFs within the broader State Street family of ETFs and is evaluated on a weekly basis. The number of holdings can vary based on sector leadership within changing markets, and with the addition of XOP and XLE, the model is equally weighted across 18 positions at 5.55% each. Year-to-date, the SSTREET model is up 21.84%, outperforming the S&P 500's return of 12.52% (through 11/24)... (Read more)

iShares Sector Rotation Change
There is a change to the iShares Sector Rotation Model ISHRSECT this week: buy the iShares US Energy ETF IYE. ISHRSECT utilizes a relative strength versus benchmark methodology which compares each of the funds in the model universe against the iShares Dow Jones US ETF IYY. Those funds showing near-term relative strength against the benchmark (i.e. are in a column of Xs) are included in the portfolio and are removed only when they show weakness relative to the benchmark. When an addition or deletion is made, the portfolio is rebalanced so each position is equally weighted. IYE was added to the portfolio because it reversed up into a column of Xs on its relative strength chart against IYY, demonstrating short-term relative strength. This is the 12th change to the model this year... (Read more)