First Trust Focus Five Model (FTRUST5)

This week’s change to the Focus Five Model involves the removal of the First Trust Nasdaq Semiconductor ETF (FTXL]) due to the fund falling below the sell threshold within the Model’s relative strength matrix rankings. In its place, the First Trust Nasdaq Pharmaceuticals ETF (FTXH) is being added, as it is the highest ranked fund not already owned within the model’s matrix. While a holding within the Focus Five Model, FTXL gained more than 95% and outperformed the S&P 500 Index (SPX) by more than 85% (11/11/2025 – 7/21/2026).

FTXH has maintained a positive trend and a buy signal on its default point and figure trend chart since October last year. Action in June of this year brought about a second buy signal as the fund moved to new all-time chart high at $39.50 earlier in July. Along with superior near-term relative strength, the overall technical picture for the ETF is positive maintaining a fund score of 4.74 (out of 6), outscoring its peers within the Biotechnology (4.36) 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 the transportation (FTXR), biotechnology (FBT), technology (FXL), Nasdaq-100 technology (QTEC), and pharmaceuticals (FTXH).

First Trust Sector Model (FTRUST)

There is a change to the First Trust Sector Model (FTRUST) this week as the model is removing 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 (7/16) action, FTXL reversed into Os after having been in a column of Xs since June 2025, causing its removal from the model. While a holding, FTXL gained over 150%, beating the S&P 500 Index (SPX) by more than 130% during the 12-month span (7/1/2025 – 7/21/2026). FTXL’s removal follows three consecutive sell signals from recent highs on the default point and figure chart, and the technical deterioration has brought the fund score down to 3.5 after having been above 5 to begin July.

With this change, the model will rebalance with eight holdings equally weighted at 14.29% and now maintain exposure to materials (FXZ), banks (FTXO), pharmaceuticals (FTXH), biotechnology (FBT), wind energy (FAN), Nasdaq-100 tech (QTEC), and technology (FXL).

First Trust Fixed Income Model (Total Return) (FTFIXINC.TR)

There is a change to the First Trust Fixed Income Model (Total Return) (FTFIXINC.TR) this month as the model removes the First Trust SSI Strategic Convertibles Securities ETF(FCVT.TR) as it fell below the sell threshold within the model’s relative strength matrix. In its place, the model is adding the First Trust Tactical High Yield ETF (HYLS.TR), which is the highest-ranking ETF in the matrix not already owned. With the change, the model will rebalance the four holdings equally to 25% and will maintain exposure to Preferreds (FPE.TR), Emerging Markets (FEMB.TR), High Yield (HYLS.TR), and Senior Loan (FTSL.TR). Additionally, the weighted average yield among the ETFs within the model has increased to 6.3%. Year-to-date, the First Trust Fixed Income Model has gained 3.68%, outperforming its benchmark AGG.TR by more than 4% (through 7/21).

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 three First Trust models with changes this week; the First Trust Focus Five (FTRUST5), the First Trust Sector (FTRUST), and First Trust Fixed Income (Total Return) models.

* - 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, August 5th, 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, August 5th, 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 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)