There is a change to the First Trust Focus Five Model (FTRUST5), which is the underlying strategy for the First Trust Dorsey Wright Focus Five ETF (FV).

This marks the first change to the First Trust Focus Five Model since April of this year and involves the removal of the First Trust Nasdaq-100 Ex-Technology Sector Index fund (QQXT) as it fell below the sell threshold in the Model’s relative strength matrix. In its place, the Focus Five Model is adding the First Trust Nasdaq Semiconductor ETF (FTXL), which is currently the number 1 ranked fund in the Model’s matrix.

On the point and figure trend chart, FTXL has maintained a positive trend since May of this year and rallied to new highs in the latter part of October. The fund possesses a strong fund score of 5.88 as of Tuesday’s (11/11) close) and maintained a score above 5 since July this year, following a return to a market relative strength buy signal. November’s action brought prices to near highs to kick off the month, only to see the trend chart reverse and give a sell signal at $120, initiating a shakeout pattern. Conveniently enough, FTXL reversed into Xs during Monday’s trading session, which marks the action point for the shakeout pattern. From here, the pattern would be complete upon a triple top break at $130.

With the change, the First Trust Focus Five Model (FTRUST5) will rebalance the five holdings to equally weighted at 20%, and the strategy will maintain exposure to Technology (through FTXL and FDN), Industrials (FXR), Utilities (FXU), and Financials (FXO).

Along with the change to the First Trust Focus Five Model (FTRUST5), there is a change to the First Trust Dynamic Focus Five ETF (FVC) as the cash allocation decreases from 52% to 48% as of today’s evaluation. The remaining 52% of the allocation will be equally weighted (approximately 10.4%) among the five sector holdings within the Focus Five Model.

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 is a change to the First Trust Focus Five Model (FTRUST5); sell QQXT, buy FTXL.

* - 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, November 26th, 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, November 26th, 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, November 19th, 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)