First Trust Focus Five Model (FTRUST5)

This week’s change to the Focus Five Model involves the removal of the First Trust Nasdaq Transportation ETF (FTXR) due to the fund falling below the sell threshold within the Model’s relative strength matrix rankings. In its place, the First Trust Nasdaq-100 Technology Sector Index Fund (QTEC) is being added, as it is the highest ranked fund not already owned within the model’s matrix after climbing from the bottom half of the rankings to second in a week’s time.

QTEC has maintained a positive trend since May 2025 and returned to a buy signal on its default point and figure trend chart in August. Action in the latter part of September brought about a second buy signal as the fund moved to match the all-time chart high at $340. While QTEC has maintained positive long-term market relative strength since early 2024, the chart returned to a column of Xs in the back half of September, highlighting positive near-term RS as well. The positive overall technical picture for ETF boosts the fund score up to 5.74 (out of 6), outscoring its peers within the Technology (4.18) group on the Asset Class Group Scores.

With the change, the model will rebalance the five holdings to equally weighted at 20% and will now maintain exposure to biotechnology (FBT), technology (FXL), pharmaceuticals (FTXH), oil & gas (FTXN), and the Nasdaq-100 technology (QTEC).

Year-to-date, the Focus Five model has gained 18.2%, outperforming the S&P 500 Index (SPX) by more than 4.5% (through 10/6).

First Trust Sector Model (FTRUST)

There is a change to the First Trust Sector Model (FTRUST) this week as the model is adding the First Trust Nasdaq Semiconductor ETF (FTXL).  Recall the First Trust Sector Model utilizes an RS versus benchmark methodology, comparing 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 Thursday’s (10/1) action, FTXL reversed into Xs after having been in a column of Xs since July this year. On the trend chart, FTXL has maintained a buy signal since May 2025 and returned to a buy signal in August. Action in the back half of September brought about a second buy signal at $240 as shares continued higher to kick off October, rallying above $265. FTXL possesses a strong fund score of 5.79 (out of 6), which is stronger than its peers within the Technology (4.18) group on the Asset Class Group Scores.

With this change, the model will rebalance with seven holdings equally weighted at 14.29% and now maintain exposure to materials (FXZ), banks (FTXO), pharmaceuticals (FTXH), biotechnology (FBT), Nasdaq-100 tech (QTEC), technology (FXL), and semiconductors (FTXL). Year-to-date, the First Trust Sector Model (FTRUST) has gained more than 28% (through 10/6) and is outperforming the S&P 500 by more than 14.5%.

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 are changes to both the First Trust Focus Five (FTRUST5) and Sector (FTRUST) Models 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, October 21st, 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, October 21st, 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, October 14th, 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)