There are changes to the First Trust Thematic Focus Five Model (Total Return) (FTTHEME5.TR) and the First Trust Sector Model (FTRUST).
First Trust Thematic Focus Five Model (Total Return)
There is a change to the First Trust Thematic Focus Five Model (Total Return) (FTTHEME5.TR) this week as it removes the First Trust Indxx Innovative Transaction & Process ETF (LEGR.TR) as it fell below the sell threshold within the Model’s total return relative strength matrix. In its place, the model is adding the First Trust Nasdaq Cybersecurity ETF (CIBR.TR). On both the default price return and the total return chart, CIBR has maintained a positive trend and buy signal since April and rallied to chart highs early last week before pulling back. CIBR maintains a 4.49 fund score, which is higher than the average score for the technology group on the Asset Class Group Scores page.
With the change, the model will rebalance the five holdings to equally weighted at 20% and now has exposure to Clean Energy (QCLN.TR), NextG (communications) (NXTG.TR), Smart Grid Infrastructure (GRID.TR), Future Vehicles & Technology (CARZ.TR), and Cybersecurity (CIBR.TR).
First Trust Sector Model
There is a change to the First Trust Sector Model (FTRUST) this week as the model is adding the First Trust Technology AlphaDEX Fund (FXL). 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 in 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 last week’s (5/29) action, FXL reversed into Xs after having been in a column of Os since early 2022. On the trend chart, FXL has maintained a positive trend and buy signal since April this year. Last week’s action led to a new all-time chart high at $220 before seeing Tuesday’s (6/9) action seeing the fund pull back from those highs. The ETF maintains a fund score of 5.71 (out of 6), which 1.5 points higher than the average score for a fund within the Technology group on the Asset Class Group Scores page.
With the change the model will rebalance with nine holdings equally weighted at 11.11% and now maintain exposure to materials (FXZ), banks (FTXO), pharmaceuticals (FTXH), biotechnology (FBT), semiconductors (FTXL), wind energy (FAN), green energy (QCLN), Nasdaq-100 tech (QTEC), and technology (FXL).
