With the end of the second quarter of 2025 a couple weeks ago – along with a reprieve in Model changes - we wanted to take time to review the performance and activity of the First Trust ETF Model lineup.
With the end of the second quarter of 2025 a couple weeks ago – along with a reprieve in Model changes - we wanted to take time to review the performance and activity of the First Trust ETF Model lineup.
First Trust Focus Five Model (FTRUST5): The First Trust Focus Five Model gained 7.64% during the second quarter, lagging the S&P 500 Index SPX at 10.57%. This quarter saw one change to the strategy as Nasdaq-100 Technology (QTEC) was sold and Nasdaq-100 Ex-Technology (QQXT) as added in late March. Moving into the third quarter, the Model maintains exposure to the Internet (FDN), Nasdaq-100 Ex-Technology (QQXT), Industrials/Producer Durables (FXR), Financials (FXO), and Utilities (FXU).
First Trust Sector Model (FTRUST): The First Trust Sector Model gained 5.45% during the second quarter, underperforming SPX. The Model had multiple changes during the second quarter, selling out of Nasdaq-100 Technology (QTEC) and buying Utilities (FXU) exposure to kick off the quarter before adding exposure to Food & Beverage (FTXG), only to step away from that position in early July. June brought about the addition of Wind Energy (FAN), while the same date in early July that saw FTXG sold from the Model, bringing with it the addition of Semiconductors (FTXL). The Model now maintains exposure to the Internet (FDN)), Industrials/Producer Durables (FXR), Community Banks (QABA), Banks (FTXO), Water (FIW), Utilities (FXU), Wind Energy (FAN), and Semiconductors (FTXL).
First Trust Size and Style Model (FTSIZESTYLE): The First Trust Size and Style gained 9.67% in Q2, lagging SPX by only 90 basis points. While there were technically two changes to the model over the past three months, the change in late April saw Mid Cap Growth (FNY) sold and Mid Cap Core (FNX) bought while the change in late June was the reversal, buying FNY and selling FNX. The strategy continues to maintain an overweight to the large cap space with Large Cap Core (FEX) and Large Cap Growth (FTC), along with Mid Cap Growth (FNY).
First Trust Income Model (FTINCOME): The First Trust Income Model gained 3.79% during the second quarter, lagging SPX by more than 6% and ending a streak of a year that the Model was the best performing equity model among the First Trust lineup. There were three changes within the First Trust Income Model this quarter as it sold Technology Dividend (TDIV) and bought European Dividend (FDD) to kick off the quarter. Late April brought the Rising Dividend Achievers (RDVY) out, while International Dividend Aristocrats (FID) was added, and mid May saw Momentum & Dividend (DDIV) removed and replaced by Morningstar Dividend (FDL). Currently, the Model maintains exposure to Energy Infrastructure (EMLP), Utilities (FXU), a European Dividend fund (FDD), International Dividend Aristocrats (FID), and Morningstar Dividend Leaders (FDL).
First Trust Thematic Focus Five Model (FTTHEME5.TR): The First Trust Thematic Focus Five Model (FTTHEME5.TR) gained over 18% during Q2, besting the S&P 500 Total Return Index (TR.SPXX) by more than 8% and making it the best performing model for the quarter. The model has two changes during the quarter. Two came in late April as Clean Energy (GRID) and Transaction & Processing (LEGR) were sold and replaced by Cybersecurity (CIBR) and International Internet (FDNI). After last week’s change to the Model, the FTTHEME5.TR maintains exposure to Streaming and Gaming (BNGE), the Internet (FDN), International Internet (FDNI), Cybersecurity (CIBR), and Cloud Computing (SKYY) (last week’s addition).
First Trust International Focus Five Model (FTRUSTINTL): The First Trust International Focus Five Model gained 14.43% during Q2, besting its benchmark, the SPDR MSCI ACWI ex-US ETF (CWI) by more than 4%. There was one change to the International model this quarter, as the strategy sold India (NFTY) and added Germany (FGM) in mid June. The model currently maintains exposure to Germany (FGM), Switzerland (FSZ), China (FCA), the United Kingdom (FKU), and the Eurozone (FEUZ).
First Trust Fixed Income Model (FTFIXINC.TR): The First Trust Fixed Income Model was up 4.63% during this last quarter, besting its benchmark (AGG.TR) by over 3%. There were two changes to the model this past quarter as it sold Low Duration Mortgage (LMBS) and bought Emerging Market Bonds (FEMB) in late April. Late June brought about the addition of Convertibles (FCVT) in place of High Yield (HYLS). The strategy currently maintains exposure to Senior Loans (FTSL), Preferreds (FPE), Emerging Market Bonds (FEMB), and Convertibles (FCVT).
