First Trust Thematic Focus Five Model (Total Return) (FTHEME5.TR)

There is a change to the First Trust Thematic Focus Five Model (Total Return) this week as it is removing the First Trust S-Network Future Vehicles & Technology ETF (CARZ.TR) for falling below the sell threshold within the model’s total return relative strength matrix. In its place, the model is adding the First Trust Nasdaq Lux Digital Health Solutions ETF (EKG.TR), which is the highest ranked fund within the total return relative strength matrix not already owned.

On both the price and total return trend charts, EKG maintains a positive trend and a buy signal. After rallying to near-term highs on both charts earlier this month, each chart has pulled back to actionable territory. Along with positive trending characteristics, EKG maintains positive near-term relative strength against the market, bringing its fund score up to 5.92, which is 1.5 points higher than the average score for a fund within the healthcare (4.39) group on the Asset Class Group Scores (ACGS) page.

With the change, the Thematic Focus Five Model will rebalance the five holdings to equally weighted at 20% and maintains exposure to the Indxx NextG (NXTG.TR), Cybersecurity (CIBR.TR), Biotechnology (FBT.TR), Cloud Computing (SKYY.TR), and Digital Health Solutions (EKG.TR). Year-to-date, the Thematic Model has gained 14.9% on a total return basis, outpacing the S&P 500 (Total Return) (TR.SPXX) by 1.5% (thru 10/20).

First Trust Size and Style Model (FTSIZESTYLE)

There is a change to the First Trust Size and Style Model (FTSIZESTYLE) for the first time since June.

For those not familiar with the First Trust Size and Style Model, the strategy is evaluated monthly and is driven by a tally matrix, like our Dynamic Asset Level Investing Rankings (DALI). Proxies representing the specified groups – the nine size and style groups in this case – are ranked within a relative strength matrix. The number of relative strength buy signals for each of the size and style group proxies is then ‘tallied’ in order to determine leadership.

Following last week’s action, Mid Cap Blend eclipsed Mid Cap Growth within the size and style rankings, causing the model to remove the First Trust Mid Cap Growth AlphaDEX Fund (FNY) and add the First Trust Mid Cap Core AlphaDEX Fund (FNX).

On its trend chart, FNX has maintained a buy signal since April 2025 and positive trend since May 2025. After a fourth buy signal in May 2026, FNX rallied to a new all-time chart high at $146 in June. September’s trading brought the chart back to Os as the fund pulled back to $136 on the chart, where it still resides as of today’s evaluation.

With the change, the model will rebalance the three funds to equally weighted at 33.33%. The model continues to maintain an overweight to Large Caps and has shifted from a growth tilt to a core/blend overweight.

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 two models with changes this week; the First Trust Thematic Focus Five (Total Return) and Size and Style 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, November 11th, 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, November 11th, 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, November 4th, 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)