There is both an addition and a deletion from the First Trust Sector Model (FTRUST) this week; buy Semis (FTXL), sell Food & Bev. (FTXG).
There is both an addition and a deletion from the First Trust Sector Model (FTRUST) this week. 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 (FTRUST) 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 within the model’s holdings, while an RS chart residing in a column of Os warrants the fund’s exclusion.
The First Trust Nasdaq Semiconductor ETF (FTXL) is being added to the model this week after seeing the model's RS chart for the fund reverse back into a column of Xs. On its trend chart, FTXL has maintained a buy signal since late April and saw the trend shift back to positive during May’s action. Last week’s trading brought about a fourth buy signal as the ETF rallied to its highest level since October 2024. FTXL maintains an acceptable fund score above the 3 threshold and is coupled with a positive score direction north of 3.
The First Trust Nasdaq Food & Beverage (FTXG) is being removed from the Model after seeing the Model RS chart for the fund reverse back into column of Os after having been in Xs since early April.
With both an addition and a deletion to the First Trust Sector Model the strategy now maintains exposure to eight holdings at 12.5%. Underlying holdings for the strategy continue to maintain an overweight to Financials, while also holding exposure to broader Industrials, Technology, Utilities, and Energy.
