+ 0.64
+ 0.46%
+ 0.60
+ 0.36%

Focus 5 ETF Gets A Dynamic Counterpart

March 21, 2016 8:12 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

The First Trust Dorsey Wright Focus 5 ETF (First Trust Exchange Traded Fund VI (NASDAQ: FV)), one of the stars of 2014's crop of rookie exchange-traded funds, now has a dynamic counterpart with last week's launch of the First Trust Dorsey Wright Dynamic Focus 5 ETF (NASDAQ: FVC).

Like FV, the First Trust Dorsey Wright Dynamic Focus 5 ETF holds, in order, the First Trust Consumer Disry Alpha Fnd (ETF) (NYSE: FXD), First Trust DJ Internet Index Fund (ETF) (NYSE: FDN), First Trust Cnsumer Stapl Alpha Fd (ETF) (NYSE: FXG), First Trust Utilities AlphaDEX Fnd (ETF) (NYSE: FXU) and the First Trust Health Care AlphaDEX Fd(ETF) (NYSE: FXH).

Related Link: A New Multi-Asset ETF Of ETFs

The Differences Between FV And FVC

While those ETFs represent all of FV's lineup, they combine for about 60 percent of the new FVC. The rest of FVC's lineup is allocated to short-term U.S. T-bills.

The relative strength analysis for FVC's equity ETFs is conducted on a bi-monthly basis as is the analysis for the ETF's cash holdings, according to Illinois-based First Trust.

Though FV is considered a passively managed ETF, relative strength analysis of its constituent ETFs is conducted weekly, meaning if one (or more) of the holdings tumble enough, they can be removed from FV and replaced with other First Trust sector and industry funds displaying better relative strength traits.

FV's ability to change holdings was on display earlier this year when it dumped the First Trust NYSE Arca Biotchnlgy Indx Fd (NYSE: FBT) in favor of FXU. However, that move left many FV investors what took so long as FV endured a massive slide in biotech stocks before parting ways to with FBT.

FVC has its work cut out for it when it comes to competing with FV, which has over $3.4 billion in assets under management. However, the new FVC is slightly less expensive than FV, as the former charges 0.79 percent per year, or $79 for each $10,000 invested, compared with FV's annual expense ratio of 0.89 percent.

Image Credit: Public Domain

Related Articles

Popular ETF Of ETFs Gets Defensive After Market Slide

3 ETFs For AstraZeneca's $39B Alexion Pharmaceuticals Takeover

The biotechnology space is always fertile territory for mergers and acquisitions, and that theme was on display over the weekend when AstraZeneca (NYSE: AZN) announced a read more

Election History Says Buy Biotech Dip

Biotechnology exchange-traded funds were hot until they weren't. History indicates recent weakness in the previously high-flying group be a symptom of election year jitters and investors shouldn't ignore these funds for too long. read more

Post-Pandemic Stars Could Align For This Biotech ETF

These days, it's not hard to find winners among health care exchange-traded funds and that's true of both established and rookie players. read more