Categories: Exchange Traded Funds (ETFs)U.S. Investing

Mix-And-Match Sector Fund Boosts Performance

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Note from the Publisher

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Roger Michalski
Publisher, Eagle Financial Publications
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We round out our review of the top three best-performing U.S. equity exchange-traded funds (ETFs) of 2015’s first half with the bronze medalist. This fund’s strategy, which differs from the approaches of the two funds that beat it, shows that exceptional returns did not accrue in just one way. However, all three of these strong-performing funds focus on momentum investing. First Trust Dorsey Wright Focus 5 ETF (FV) provides exposure to five different sector funds.

This fund considers sector strength algorithmically, including a calculation based on momentum, the key theme that ties together the top three funds for the half. It rebalances the funds in its holdings on a weekly basis.

As you can see in the chart below, this fund has been increasing steadily in value for some time. It offers a 0.15% dividend yield that may help offset the 0.94% current cost of ownership. Current total assets for the fund are more than $4.2 billion. FV’s performance through the first half of the year was 10.43%, and it has continued to make gains. This fund is up 14.14% year to date.

Exclusive ETF Talk: Another Golden Opportunity

Current holdings for FV include the First Trust NYSE Arca Biotechnology Index Fund (FBT), 26.78%; First Trust Health Care AlphaDEX Fund (FXH), 20.76%; First Trust Dow Jones Internet Index Fund (FDN), 18.89%; First Trust Consumer Staples AlphaDEX Fund (FXG), 17.18%; and First Trust Consumer Discretionary AlphaDEX Fund (FXD), 16.28%.

If you like First Trust’s track record of choosing the right sectors at the right times to produce results, First Trust Dorsey Wright Focus 5 ETF (FV) could be worth considering for your own portfolio.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed it, I encourage you to read my e-letter column from last week about the second-place fund of 2015’s first half. I also invite you to comment in the space provided below.

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/