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 Global Wind Energy ETF (FAN).  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 Monday’s (9/14) action, FAN reversed into Os after having been in a column of Xs since June 2025, causing its removal from the model. FAN’s removal follows the fund consolidating in the lower $20 range on its trend chart after reaching rally high at $27 in April. Though the ETF still maintains an acceptable fund score above 3.0, the recent near-term underperformance relative to broader indices like the S&P 500 Cap (SPX) and Equal Weighted (SPXEWI) indices, along with relative weakness against peers in the energy space, shows remaining strength is coming from the long-term positive trend.

With this change, the model will rebalance with six holdings equally weighted at 16.67% and now maintain exposure to materials (FXZ), banks (FTXO), pharmaceuticals (FTXH), biotechnology (FBT), Nasdaq-100 tech (QTEC), and technology (FXL). Year-to-date, the First Trust Sector Model (FTRUST) has gained more than 25% (thru 9/15) and is outperforming the S&P 500 by more than 14%.

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 Sector Model (FTRUST) this week as the model; remove FAN.

* - 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, September 23rd, 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, September 23rd, 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, September 30th, 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)