There is a change to the First Trust Income Model (FTINCOME) this week.

The change to the First Trust Income Model involves the removal of the First Trust S&P International Dividend Aristocrats ETF (FID), which fell below the sell threshold within the Model’s relative strength matrix rankings, and the addition of the First Trust Global Select Dividend Index Fund (FGD). On the default point and figure trend chart, FGD has maintained a buy signal since October 2022 and a positive trend since January 2023. Since reversing back into Xs in April of last year, FGD has maintained that column as the fund rallied to a new high at $30.50. Action on the more sensitive 0.25 point per box chart confirms the positive technical picture with four buy signals since April last year. Tuesday’s (1/6) action brought the 0.25 point per box chart back into Xs, matching the December chart high, and placing it with one box of a potential fifth buy signal and chart high. Initial support now lies at $30, while additional can be found in the $27.50 to $29 range. With the change, the First Trust Income Model will rebalance the five holdings to equally weighted at 25%, while maintaining exposure to Nasdaq Technology Div. (TDIV), Energy Infrastructure (EMLP), Stoxx European Div. (FDD), Utilities (FXU), and Global Div. (FGD) funds.

With the end of the fourth 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 1.30% during the fourth quarter, lagging the S&P 500 Index at 2.35%. There were two changes to the strategy during the fourth quarter as the Nasdaq-100 Ex-Technology (QQXT) and Industrials (FXR) were sold, while adding Semiconductors (FTXL) and Aerospace & Defense (MISL). Moving into 2026, the Model maintains exposure to the Internet (FDN), Financials (FXO), Utilities (FXU), Semis (FTXL), and Aerospace & Defense (MISL).

First Trust Sector Model (FTRUST): The First Trust Sector Model gained 2.95% during the fourth quarter, outperforming SPX by 60 basis points. The Model had multiple changes during the fourth quarter, selling exposure to Community Banks (QABA), Industrials (FXR), and Water (FIW), while adding exposure to Biotechnology (FBT). This leaves the Model maintaining exposure to the Internet (FDN), Banks (FTXO), Utilities (FXU), Wind Energy (FAN), Semiconductors (FTXL), Clean Energy (QCLN), and Biotechnology (FBT).

First Trust Size and Style Model (FTSIZESTYLE): The First Trust Size and Style gained 19 basis points in Q4, lagging the S&P 500 Index at 2.35%. 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 1.70% during the fourth quarter, lagging SPX by more than 65 basis points. There were no changes within the Model this quarter. The Model enter the new year maintaining exposure to Energy Infrastructure (EMLP), Utilities (FXU), a European Dividend fund (FDD), International Dividend Aristocrats (FID), and Technology Dividend Fund (TDIV), but today’s (1/7) change brings in exposure from the Dow Jones Global Select Dividend Fund (FGD).

First Trust Thematic Focus Five Model (FTTHEME5.TR): The First Trust Thematic Focus Five Model (FTTHEME5.TR) lost 6.8% during Q4, lagging the S&P 500 Total Return Index (TR.SPXX). Even with the negative quarter, the Thematic Model was the best performing First Trust model for the year. The model had one change during the quarter, removing the International Internet (FDNI) fund and adding Clean Energy (QCLN). The FTTHEME5.TR maintains exposure to Streaming and Gaming (BNGE), the Internet (FDN), Cybersecurity (CIBR), Cloud Computing (SKYY), and Clean Energy (QCLN).

First Trust International Focus Five Model (FTRUSTINTL): The First Trust International Focus Five Model gained 1.16% during Q4, lagging its benchmark, the SPDR MSCI ACWI ex-US ETF (CWI), up 2.86%. There were two changes to the international model this quarter, as it removed Switzerland (FSZ) and replaced it with International Internet (FDNI) in October before removing FDNI in December and replacing it with Europe (FEP). The strategy now maintains exposure to Germany (FGM), China (FCA), the United Kingdom (FKU), Europe (FEP), and the Eurozone (FEUZ).

First Trust Fixed Income Model (FTFIXINC.TR): The First Trust Fixed Income Model was up 87 basis points during this last quarter, in-line with its benchmark (AGG.TR). There were three changes to the model this past quarter as it sold Senior Loans (FTSL) and bought Preferreds (FPE) in late October before rotating between Senior Loans and Convertibles (FCVT). The strategy outperformed its benchmark by more than 3% in 2025 and enters 2026 maintaining exposure to  High Yield (HYLS), Emerging Market Bonds (FEMB), Preferreds (FPE), 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 is a change to the First Trust Income Model (FTINCOME) this week; sell FID, buy FGD.

* - 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, January 21, 2026. 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, January 21, 2026. 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, January 14, 2026. 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)