Mix-And-Match Sector Fund Boosts Performance

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Note from the Publisher

For all of you dividend fans out there, I am thrilled to announce that we have added www.DividendInvestor.com to the Eagle family of products. With screening tools, an all-star ranking of dividend stocks, the best dividend calendar on the web, personalized alerts and more, this site is a great complement to our investment products. Check it out today… go to www.DividendInvestor.com now!

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.

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.