There is a change to the First Trust Income Model (FTINCOME) this week. The First Trust Rising Dividend Achievers ETF (RDVY) is being removed after falling below the sell threshold within the model’s relative strength matrix rankings. In its place, the model is adding the First Trust Utilities AlphaDEX Fund (FXU), which is the highest‑ranking fund not already held.

FXU maintains a strong fund score of 5.23, which is above the average score of 4.52 for funds within the Utilities asset class, as shown on the Asset Class Group Scores page. March’s activity generated a long‑term market relative strength buy signal versus the S&P 500 Equal Weight Index (SPXEWI), following an RS sell signal that had been in place since December 2018. On the trend chart, FXU has maintained a positive trend since December 2023 and has been on a buy signal since February of this year. Trading in the latter part of March led to a reversal back into Xs, while April has seen the fund rally to retest its all‑time high of $51. Initial support is at $48, with additional support in the low‑to‑mid $40s.

With this change, the First Trust Income Model will rebalance its five holdings to an equal weight of 20% each and will maintain exposure to the Dow Jones Global Select Dividend Fund (FGD), Morningstar Dividend Leaders Fund (FDL), North American Energy Infrastructure Fund (EMLP), STOXX European Dividend Fund (FDD), and Utilities AlphaDEX Fund (FXU). Year to date, the First Trust Income Model has gained 6.93%, outperforming the S&P 500 Index (SPX) by more than 6%.

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 RDVY, buy FXU.

* - 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, April 22nd, 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, April 22nd, 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, April 29th, 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)