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