This week’s evaluation (10/15) led to changes in the model holdings and universe of the First Trust International Model (FTRUSTINTL).

As part of evaluations of NDW models and strategies, the First Trust International Model is seeing an addition of five international-related ETFs to the model universe (highlighted in green). This update comes after the number of funds in the inventory were reduced alongside the closing of the Brazil fund FBZ, which was communicated a few weeks ago. The additions are intended to broaden the scope of potential trends available to the model, allowing the strategy to focus exposure on specific international themes as well as specific country representatives.

The First Trust International Model universe will now consist of 19 ETFs but will continue to seek exposure to the five strongest ETFs as defined within the model’s relative strength matrix. The sell threshold within the model’s matrix has been adjusted accordingly to factor in the addition of the five ETFs to the universe. The model will continue to be evaluated on a bi-weekly basis, and changes to the model holdings will continue to rebalance to equally weighted positions at 20% in each fund.

After last week’s action, the First Trust Switzerland AlphaDEX Fund (FSZ) fell below the sell threshold within the old universe model matrix, warranting its removal from the strategy and allowing for the shift to the new model universe. While a holding since November 2022, FSZ was up 57% (11/1/2022 – 10/14/2025) and outperformed the model’s benchmark, the MSCI ACWI ex-US ETF (ACWX), by 2%.

In the place of FSZ and with the universe change, the new addition to the First Trust International Model is the First Trust Dow Jones International Internet (FDNI), which is the highest ranked ETF with the new model universe’s matrix not already owned. On the trend chart, FDNI has maintained a buy signal since April this year and a positive trend since May. Following a fourth buy signal in September at $37, FDNI rallied to a multi-year high at $39.50 to start off Q4 before pulling back to $37 during last Friday’s (10/10) trading. The fund has exhibited positive long-term market and peer relative strength (RS) against the S&P 500 Equal Weight Index (SPXEWI) and iShares MSCI ACWI ex-US ETF (AWCX) since September 2024. FDNI maintains a strong fund score of 5.89 (out of 6), which is a full point higher than the average score for a fund within the Non-US Equity (4.57) and All Global & International Diversified (4.39) groups.

With the change to the model holdings, the First Trust International Model will rebalance the five holdings to equally weighted at 20%. The model now maintains exposure to China (FCA), Germany (FGM), the Eurozone (FEUZ), the United Kingdom (FKU), and the International Internet (FDNI) fund.

First Trust Sector Model (FTRUST)

There is a change to the First Trust Sector Model (FTRUST) with the removal of the First Trust Nasdaq ABA Community Bank Fund (QABA). Recall the First Trust Sector Model utilizes an RS versus benchmark methodology, as opposed to an RS matrix of the model’s full ETF lineup. The First Trust Sector Model’s process compares each of the funds within the model’s universe to the S&P 500 Index (SPX) on a 6.5% scale RS chart. If the RS chart resides in a column of Xs, the ETF is included in the model’s holdings, while an RS chart residing in a column of Os warrants the fund’s exclusion. Following action last week, the Model’s RS chart comparing QABA to SPX reversed back into a column of Os for the first time since July 2024. With the removal of QABA, the First Trust Sector Model will rebalance with eight holdings to equally weighted at 12.50%. The removal of QABA decreases the model’s financials exposure, and the strategy maintains an overweight toward industrials and technology.

This weekly overview is designed to be used as a "radar" screen to bring your attention to potentially important technical changes that may require your attention and potential action. When evaluating the Fund Score, the strongest issues have scores of 4 or higher while those ETFs with scores below a 3 are no longer considered solid citizens.

The ETFs with the most relative strength buy signals (suggesting outperformance) versus the others in the group are listed at the top. These ETFs should be overweighted in the portfolio. Those ETFs with the least amount of relative strength buy signals versus the others in the group are listed at the bottom. These ETFs should be underweighted in the portfolio.

The First Trust ETF Portfolios are designed to identify major sector themes in the market place through the use of the Point & Figure relative strength tools. For more information on the portfolio construction and back testing, see the model info file on the models page.  To enter a portfolio amount and see shares to be purchased as well as modify the portfolio to your specifications, click here. (Note: The First Trust ETF Portfolios will be updated Wednesday mornings by 9:30 am EST) 

Weekly Changes:  There is are changes to the First Trust International Model (FTRUSTINTL), along with the First Trust Sector Model (FTRUST).

* - Dates prior to 1/9/2008, which is when the First Trust Sector ETF Model Portfolio became available in the First Trust Weekly ETF Report, are representative of when the position was added to the backtested model.

* - The next evaluation date for the Focus Five Model is Wednesday, October 22, 2025. Dates prior to 10/20/2009, which is when the First Trust Focus Five ETF Model Portfolio became available in the First Trust Weekly ETF Report, are representative of when the position was added to the backtested model.

* - The next evaluation date for the Thematic Focus Five Model is Wednesday, October 22, 2025. Dates prior to 9/13/2023, which is when the First Trust Thematic Focus Five ETF Model Portfolio became available in the First Trust Weekly ETF Report, are representative of when the position was added to the backtested model.

* - The next evaluation date for the International Focus Five Model is Wednesday November 5th, 2025. Dates prior to 2/22/2012, which is when the First Trust International Focus Five ETF Model Portfolio became available in the First Trust Weekly ETF Report, are representative of when the position was added to the backtested model.

Am I better off owning the managed mutual fund or the unmanaged ETF? The table below will help you answer that question. For each of the nine major asset classes and sectors, see the Top 20 mutual funds in NAV compared to the First Trust Universe of ETFs. The results are ordered by Fund Score, from highest to lowest. The Fund Score is a snapshot of the overall health of the fund based upon relative strength versus the broad market, relative strength versus its peers, and other trend measures. Those ETFs and Funds with a score above 3 are considered solid citizens with those having scores of 4 and above ideal candidates for purchase. Those ETFs and Funds with a score below 3 should be examined closer from a technical basis as they are not holding their ground versus the market and their peer group.
 

(Click any link above to see the Fund Score of the First Trust ETFs and the funds with the largest Net Assets in that category)