With the end of the second quarter of 2026 this 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 22.31% during the second quarter, outpacing the S&P 500 Index by more than 7%. There were three changes to the strategy during the second quarter as the Oil & Gas (FTXN) replaced Aerospace & Defense (MISL) in early May before seeing Oil & Gas and broader Energy (FXN) sold in the latter stages of the quarter.  The most recent additions – the Nasdaq-100 Tech. (QTEC) and broader Technology (FXL) – highlight the improvement of the sector through the quarter. Moving into the third quarter, the model maintains exposure to the Semi (FTXL), Transportation (FTXR), Nasdaq-100 Tech. (QTEC), Biotechnology (FBT), and broader Technology (FXL). Year-to-date, the Focus Five Model has outpaced the S&P 500 Index by more than 9%.

First Trust Sector Model (FTRUST): The First Trust Sector Model gained over 17% during the second quarter, outperforming the S&P 500 by 2%. The model had multiple changes during the second quarter, selling exposure to Oil & Gas (FTXN) Natural Gas (FCG), Utilities (FXU), and Energy (FXN), while adding exposure to the Nasdaq-100 Tech (QTEC) and broader Technology (FXL). This leaves the Model maintaining exposure to Banks (FTXO), Wind Energy (FAN), Semiconductors (FTXL), Clean Energy (QCLN), Biotechnology (FBT), Materials (FXZ), Pharmaceuticals (FTXH), Nasdaq-100 Tech. (QTEC), and Technology (FXL). Year-to-date, the sector model has gained over 29%, outperforming the S&P 500 by just shy of 20%.

First Trust Size and Style Model (FTSIZESTYLE): The First Trust Size and Style gained 18.55% in Q2, outpacing the S&P 500 Index by more than 3.5%. There was one change to the model as Mid Cap Core (FNX) rotated out, while Mid Cap Growth (FNY) rotated in. 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). Year-to-date, the First Trust Size and Style Model has gained 18.23%, outperforming the S&P 500 by more than 8.5%.

First Trust Income Model (FTINCOME): The First Trust Income Model gained 50 basis points during the second quarter, lagging SPX by more than 14%. There were two changes within the model this quarter. The Rising Dividend Achievers ETF (RDVY) was sold in the middle of April, replaced briefly by Utilities (FXU) before the sector was sold and replaced by the Technology Dividend fund (TDIV). The model enters the new quarter maintaining exposure to Energy Infrastructure (EMLP), a European Dividend fund (FDD), Technology Dividend Fund (TDIV), Morningstar Dividend Fund (FDL), and 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) gained over 30% during Q2, outperforming the S&P 500 Total Return Index (TR.SPXX) by more than 15% and making the Thematic Model the best performing First Trust model for the quarter. The model had one change during the quarter, removing the Innovative Transaction & Process (LEGR) fund and adding Cybersecurity (CIBR). Moving into Q3, the Thematic Model maintains exposure to Cybersecurity (CIBR), Clean Energy (QCLN), Grid Infrastructure (GRID), Future Vehicles & Tech. (CARZ), and NextG (NXTG) communications. Year-to-date, the thematic model has gained more than 18%, outperforming the S&P 500 Total Return Index by more than 8%.

First Trust International Focus Five Model (FTRUSTINTL): The First Trust International Focus Five Model gained 8.55% during Q2, lagging its benchmark, the SPDR MSCI ACWI ex-US ETF (CWI), up 11.5%. There was one change to the international model this quarter, as it removed China (FCA) and replaced it with the International Equity Opportunities Fund  (FPXI). The strategy now maintains exposure to Germany (FGM), Europe (FEP), the Eurozone (FEUZ), Asia Pacific Ex-Japan (FPA), and the International Equity Opportunities Fund (FPXI).

First Trust Fixed Income Model (FTFIXINC.TR): The First Trust Fixed Income Model was up 5.74% during this last quarter, outperforming its benchmark (AGG.TR) by more than 5%. There was one change to the model this past quarter as it sold the Low Duration Mortgage Fund (LMBS) and bought Senior Loans (FTSL). The strategy has outperformed its benchmark by more than 5% year-to-date, and enters the new quarter maintaining exposure to Emerging Market Bonds (FEMB), Preferreds (FPE), Convertibles (FCVT), and Senior Loan (FTSL).

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 were no changes to any of the models covered within the report this week.

* - 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, July 8th, 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, July 8th, 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, July 15th, 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)