With the end of the third quarter of 2025 last week, 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 4.46% during the third quarter, lagging the S&P 500 Index at 7.79%. There were no changes to the strategy during the third quarter. Moving into Q4, 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 7.18% during the third quarter, lagging SPX by 60 basis points. The model had multiple changes during the third quarter, kicking off the quarter by selling exposure to food & beverage (FTXG) and adding semiconductors (FTXL). clean energy (QCLN) was added in the closing weeks of Q3, leaving the model maintaining exposure to the internet (FDN), industrials/producer durables (FXR), community banks (QABA), banks (FTXO), water (FIW), utilities (FXU), wind energy (FAN), semiconductors (FTXL), and QCLN to start Q4.

First Trust Size and Style Model (FTSIZESTYLE): The First Trust Size and Style gained 7.92% in Q3, besting SPX by 13 basis points, and placing the model within 1% of the index on a year-to-date basis. There were no changes to the model over the past three months, and 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 5% during the third quarter, lagging SPX by more than 2.5%. There was a change within the Model this quarter as it sold the Morningstar Dividend Leaders Fund (FDL) and added the Technology Dividend Fund (TDIV) maintains exposure to Energy Infrastructure (EMLP), Utilities (FXU), a European Dividend fund (FDD), International Dividend Aristocrats (FID), and Technology Dividend Fund (TDIV).

First Trust Thematic Focus Five Model (FTTHEME5.TR): The First Trust Thematic Focus Five Model (FTTHEME5.TR) gained just shy of 8% during Q3, slightly lagging the S&P 500 Total Return Index (TR.SPXX). The Thematic Model was the best performing First Trust model for the quarter and is now outperforming the Index by roughly 12% on a year-to-date basis. The model had one change during the quarter, removing Next Gen Infrastructure (RBLD) and adding Cloud Computing (SKYY). The FTTHEME5.TR maintains exposure to Streaming and Gaming (BNGE), the Internet (FDN), International Internet (FDNI), Cybersecurity (CIBR), and Cloud Computing (SKYY).

First Trust International Focus Five Model (FTRUSTINTL): The First Trust International Focus Five Model gained 6.89% during Q3, roughly in-line with its benchmark, the SPDR MSCI ACWI ex-US ETF (CWI), up 6.92%. There were no changes to the international model this quarter, as the strategy 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 4.47% during this last quarter, besting its benchmark (AGG.TR) by over 2%. There was one change to the model this past quarter as it sold Preferreds (FPE) and bought High Yield (HYLS) in late July. The strategy is outperforming its benchmark by more than 3% on a year-to-date basis and currently maintains exposure to Senior Loans (FTSL), High Yield (HYLS), Emerging Market Bonds (FEMB), and Convertibles (FCVT).

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 were no changes to any of the First Trust Models covered within the report this week.

* - 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 22nd, 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 22nd, 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, October 15th, 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)