There are five First Trust Models with changes this week.

First Trust Focus Five with Cash FTRUST5CASH

There were no changes in the sector holdings within the Focus Five, but there is a change to the Cash allocation within the First Trust Focus Five with Cash Model (FTRUST5CASH), the underlying strategy for the First Trust Dynamic Focus Five ETF (FVC). The strategy will increase from 71% to 80% cash allocation as of today’s evaluation, while the remaining 20% will be equally weighted among the five sector holdings within the First Trust Focus Five Model.

First Trust Thematic Focus Five Model (Total Return) FTTHEME5.TR

There were two changes to the Thematic Focus Five Model this week. The First Trust Indxx Innovative Transaction & Process ETF LEGR and First Trust Nasdaq Clean Edge Smart Grid Infrastructure Fund GRID are being removed as they fell below the sell threshold within the Model’s relative strength matrix rankings. In their place, the Model is buying the First Trust Nasdaq Cybersecurity CIBR and the First Trust Dow Jones International Internet ETF FDNI, which are the highest-ranking funds not already owned. Both CIBR and FDNI score above the 4-score threshold, outscoring their peers, with each maintaining positive near and long-term relative strength against the market. With the change, the Model will rebalance the five holdings to 20% and maintain exposure to the following themes: Streaming & Gaming BNGE, the Internet FDN, NextGen Infrastructure RBLD, Cybersecurity CIBR, and an international Internet fund FDNI. Year-to-date, the Thematic Focus Five Model is down just shy of -6% on a total return basis, outperforming its benchmark, the S&P 500 (Total Return) Index TR.SPXX, by roughly 6% (thru 4/22).

First Trust Income Model FTINCOME

The change to the First Trust Income Model involves the removal of the First Trust Rising Dividend Achievers ETF RDVY as it fell below the sell threshold within the Model’s relative strength matrix. In its place it is adding the First Trust S&P International Dividend Aristocrats ETF FID, which is the highest-ranking ETF within the matrix not already owned. The marks the second trade this month in which the Income Model has sold a US equity-based fund and bought international equity exposure. FID maintains a current fund score of 4.84, which is stronger than the average score for a fund within the Global Income group (3.5). On the trend chart, FID has maintained a buy signal and positive trend since May last year, and Tuesday’s action saw the fund complete a third consecutive buy signal and bullish triangle at $17.75. Year-to-date, the Frist Trust S&P International Dividend Aristocrats ETF FID is up more than 9%, and the Income Model is outperforming its benchmark, the S&P 500 Index SPX, by more than 7%.  With the change, the Model will rebalance the five holdings equally to 20%, and will maintain exposure to Energy Infrastructure EMLP, a European Dividend fund FDD, an International Dividend Aristocrats fund FID, Utilities FXU, and a Momentum & Dividend fund DDIV.  

First Trust Size and Style Model FTSIZESTYLE

The change to the First Trust Size and Style Model involves the removal of the First Trust Mid Cap Growth AlphaDEX Fund FNY as it fell to fourth within the DALI Size and Style Rankings on April 10^th. In its place it is adding the First Trust Mid Cap Core AlphaDEX Fund FNX, as Mid Cap Blend moved up to third with the Size and Style rankings. With the change, the Size and Style Model will rebalance the three holdings equally to 33%, and will maintain exposure to Large Cap Growth FTC, Large Cap Core FEX, and Mid Cap Core FNX.

First Trust Fixed Income Model (Total Return) FTFIXINC.TR

The change to the First Trust Fixed Income Model involves the removal of the First Trust Low Duration Mortgage Opportunities Fund LMBS as it fell below the sell threshold within the Model’s relative strength matrix. In its place it is adding the First Trust Emerging Market Local Currency Bond ETF FEMB, which is the highest-ranking ETF within the matrix not already owned. The marks the second trade within the Model during the past two months. With the change, the Fixed Income (Total Return) Model will rebalance the four holdings to equally at 25%, and will maintain exposure to Tactical High Yield HYLS, Senior Loan FTSL, Preferreds FPE, and Emerging Markets FEMB.

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 are five First Trust Models with changes this week. See the weekly feature for full details.

* - 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, May 7th, 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, May 7th, 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, April 30th, 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)